Financial planning

1. Rolling Company bonds have a coupon rate of 6.00 percent, 24 years to maturity, and a current price of $1,186. What is the YTM? The current yield?2. A bond with 24 years until maturity has a coupon rate of 8.2 percent and a yield to maturity of 6.5 percent. What is the price of the bond?3. A bond with a maturity of 18 years sells for $1,058. If the coupon rate is 7.2 percent, what is the yield to maturity of the bond?4. Atlantis Fisheries issues zero coupon bonds on the market at a price of $492 per bond. Each bond has a face value of $1,000 payable at maturity in 14 years. What is the yield to maturity for these bonds?5. Atlantis Fisheries issues zero coupon bonds on the market at a price of $453 per bond. These are callable in 5 years at a call price of $620.

Using semiannual compounding, what is the yield to call for these bonds?6. Atlantis Fisheries issues zero coupon bonds on the market at a price of $425 per bond.

If these bonds are callable in 8 years at a call price of $538, what is their yield to call?7. Fooling Company has a 11.6 percent callable bond outstanding on the market with 25 years to maturity, call protection for the next 10 years, and a call premium of $100.

What is the yield to call (YTC) for this bond if the current price is 107 percent of par value?

Solution:

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