please show work for each problem for business calculator. ex. rate, N, PMT,PV,F

Question

please show work for each problem for business calculator. ex. rate, N, PMT,PV,FV

Exam 2 Problems 1 Dimebox Inc has some outstanding bonds with 15 years to maturity remaining. The bonds were issued with a face value of $1,000. The coupon interest rate is 8.3 percent and is paid annually. If Brett requires a return of 10.6%, calculate the value of the bond to Brett. 2 Neutroni Inc has some outstanding bonds with 17 years to maturity remaining. The bonds were issued with a face value of $1,000. The coupon interest rate is 9.9 percent and is paid annually. Interest rates have declined since the bonds were issued. Investors are now requiring a return of 7.6% on these bonds. What is the current price? 3 Bauer's Betas has some outstanding bonds with 15 years to maturity remaining. The bonds were issued with a face value of $1,000. The coupon interest rate is 10.2 percent and is paid annually. The bonds are currently selling for $840. What is the yield to maturity of these bonds?

Explanation / Answer

1. value of the bond is the present value of interest and principal payments at required rate of return

Interest rate= 8.3%

Interest amount = 1000*8.3%

Face value= 1000

Present vlaue at required rate of 10.6%:

Bond value= 830.89

2.

Interest rate= 9.9%

Interest amount = 1000*9.9%= 99

Face value= 1000

Present vlaue at required rate of 7.6%:

bond value= 1215.51

3. Interest= 1000*10.2%= 102

YTM is the rate at which current selling price equals present value of all future receipts.

Using trial and error method at a discount rate of 12.62% present value of interest and pricipal repayments equals 840:

Hence YTM= 12.62%

Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Interest receipts 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 Principal receipt 1000 Discount factor(10.6%) 0.904159 0.817504 0.739153 0.668312 0.604261 0.546348 0.493985 0.446641 0.403835 0.365131 0.330137 0.298496 0.269888 0.244022 0.220634 Discounted cash flow 75.04521 67.85281 61.34974 55.46993 50.15364 45.34687 41.00079 37.07124 33.5183 30.30587 27.40133 24.77517 22.40069 20.25379 238.947 Present value 830.89

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