.29, if the bond 6) What is the annual coupon payment from a $1,000 par value bo

Question

.29, if the bond 6) What is the annual coupon payment from a $1,000 par value bond that is selling for $743 years to maturity, interestis paid semi-annually, and its yield to maturity is 9% APR? $50.53 B) $50.00 C) $45 D) $90 ?) What is the approximate yield to maturity of a $1,000 par value bond if it is selling for $970, matures in 6 years and pays annual coupon of 12 percent? A) 1.27% B) 1296 12.75% 15% 8) Alisports Corp issued $1,000 par value bonds bearing a coupon rate of 10% APR, but with interest paid semi- annually. The bonds have 4 years remaining to maturity and a current price of $940 per bond. What is the bonds annual yield to maturity? A) 6.00% B) 5.96% C) 11.97% 01 1.93% 9) Seven years ago, you bought one Bitcoin for S1. Today, you sold your Bitcoin at a price of $5,800. What is your annualized rate of return from this investment? A) 5,799% B) 828.43% 244.85% 33.97% D) are promised a fixed periodic dividend that must be paid prior to paying any common stock 10) dividends Preferred stockholders Common stockholders C) Bondholders D) Creditors 11) A 6% preferred stock with a market price of S110 per share and S100 par value carries a cash dividend of A) $10.00 B S6.00 C) $6.60 D) $0.60 12) Shares of stock currently owned by a firm's shareholders are called A) authorized shares B) issued shares outstanding shares D) treasury shares 13) Treasury stock refers to the A) sale of stock at a price greater than the par value B) stock issued by the US government firm's repurchase of own outstanding stock D) authorization of additional shares of stock by the firm's board of directors

Explanation / Answer

Since, multiple questions have been posted, I have answered the first 2 (Question 7 and Question 8).

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Question 7:

In the given case, we need to calculate the value of annual coupon payment. The payment can be calculated with the use of PMT (Payment) function/formula of EXCEL/Financial Calculator. The PMT function/formula is PMT(Rate,Nper,-PV,FV) where Rate = Interest Rate (here, Yield to Maturity), Nper = Period, PV = Present Value (here, Current Bond Price) and FV = Future Value (here, Face Value of Bonds).

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Here, Rate = 9%/2, Nper = 10*2 = 20, PV = $743.29 and FV = $1,000 [we use 2 since the bond is semi-annual]

Using these values in the above function/formula for PMT, we get,

Annual Coupon Payment = PMT(9%/2,20,-743.29,1000)*2 = $50.53 (which is Option A)

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Question 8:

The yield to maturity can be calculated with the use of Rate function/formula of EXCEL/Financial Calculator. The function/formula for Rate is Rate(Nper,PMT,-PV,FV) where Nper = Period, PMT = Payment (here, Coupon Payment), PV = Present Value (here, Current Bond Price) and FV = Future Value (here, Face Value of Bonds).

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Here, Nper = 6, PMT = 1,000*12% = $120, PV = $970 and FV = $1,000

Using these values in the above function/formula for Rate, we get,

Yield to Maturity = Rate(6,120,-970,1000) = 12.75% (which is Option C)

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