1. Flower Valley Company bonds have a 12.50 percent coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will
1.Flower Valley Company bonds have a 12.50 percent coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature 5 years from now. Compute the value of Flower Valley Company bonds if investors required rate of return is 8.79 percent
2) Dan is considering the purchase of Super Technology, Inc. bonds that were issued 6 years ago. When the bonds were originally sold they had a 24-year maturity and a 8.25 percent coupon interest rate, paid annually. The bond is currently selling for $883. Par value of the bond is $1,000. What is the yield to maturity on the bonds if you purchased the bond today?
Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).
3) A few years ago, Spider Web, Inc. issued bonds with a 6.49 percent annual coupon rate, paid semiannually. The bonds have a par value of $1,000, a current price of $1,020, and will mature in 13 years. What would the annual yield to maturity be on the bond if you purchased the bond today?
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
You should use Excel or financial calculator.
4) 11 years ago, Blue Lake Corp. issued 30 year to maturity zero-coupon bonds with a par value of $5,000. The current interest rate on this type of bond is 8.12 percent, compounded annually. What is the current price of the bond?
5) What is the yield to call of a 20-year to maturity bond that pays a coupon rate of 16.96 percent per year, has a $1,000 par value, and is currently priced at $927? The bond can be called back in 8 years at a call price $1,094. Assume annual coupon payments.
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
You should use Excel or financial calculator.
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