You find the following corporate bond quotes. To calculate the number of years u

Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000. Company (Ticker) Coupon Maturity Last Price Last Yield EST $ Vol (000’s) Xenon, Inc. (XIC) 6.600 Jan 15, 2032 94.303 ?? 57,374 Kenny Corp. (KCC) 7.240 Jan 15, 2031 ?? 5.38 48,953 Williams Co. (WICO) ?? Jan 15, 2038 94.855 7.08 43,814 What price would you expect to pay for the Kenny Corp. bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price $ What is the bond’s current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield %

Explanation / Answer

N = 15

FV = 2000

PMT = 7.240% of 2000

rate = 5.38%

use PV function in Excel

price of the Kenny Corp bond = 2376.39

current yield = 144.8//2376.39 = 6.09%

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