Question
Barry's Steroids Company has $1,000 par value bonds outstanding at 15 percent interest. The bonds will mature in 30 years. If the percent yield to
Barry's Steroids Company has $1,000 par value bonds outstanding at 15 percent interest. The bonds will mature in 30 years.
If the percent yield to maturity is 13 percent, what percent of the total bond value does the repayment of principal represent?Assume interest payments are annual. UseAppendix BandAppendix Dfor an approximate answer but calculate your final answer using the formula and financial calculator methods.(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
IF (1 + i)n
Percent
Period
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
1 ......................
0.990
0.980
0.971
0.962
0.952
0.943
0.935
0.926
0.917
0.909
0.901
0.893
2 ......................
0.980
0.961
0.943
0.925
0.907
0.890
0.873
0.857
0.842
0.826
0.812
0.797
3 ......................
0.971
0.942
0.915
0.889
0.864
0.840
0.816
0.794
0.772
0.751
0.731
0.712
4 ......................
0.961
0.924
0.888
0.855
0.823
0.792
0.763
0.735
0.708
0.683
0.659
0.636
5 ......................
0.951
0.906
0.863
0.822
0.784
0.747
0.713
0.681
0.650
0.621
0.593
0.567
6 ......................
0.942
0.888
0.837
0.790
0.746
0.705
0.666
0.630
0.596
0.564
0.535
0.507
7 ......................
0.933
0.871
0.813
0.760
0.711
0.665
0.623
0.583
0.547
0.513
0.482
0.452
8 ......................
0.923
0.853
0.789
0.731
0.677
0.627
0.582
0.540
0.502
0.467
0.434
0.404
9 ......................
0.914
0.837
0.766
0.703
0.645
0.592
0.544
0.500
0.460
0.424
0.391
0.361
10 .....................
0.905
0.820
0.744
0.676
0.614
0.558
0.508
0.463
0.422
0.386
0.352
0.322
11 .....................
0.896
0.804
0.722
0.650
0.585
0.527
0.475
0.429
0.388
0.350
0.317
0.287
12 .....................
0.887
0.788
0.701
0.625
0.557
0.497
0.444
0.397
0.356
0.319
0.286
0.257
13 .....................
0.879
0.773
0.681
0.601
0.530
0.469
0.415
0.368
0.326
0.290
0.258
0.229
14 .....................
0.870
0.758
0.661
0.577
0.505
0.442
0.388
0.340
0.299
0.263
0.232
0.205
15 .....................
0.861
0.743
0.642
0.555
0.481
0.417
0.362
0.315
0.275
0.239
0.209
0.183
16 .....................
0.853
0.728
0.623
0.534
0.458
0.394
0.339
0.292
0.252
0.218
0.188
0.163
17 .....................
0.844
0.714
0.605
0.513
0.436
0.371
0.317
0.270
0.231
0.198
0.170
0.146
18 .....................
0.836
0.700
0.587
0.494
0.416
0.350
0.296
0.250
0.212
0.180
0.153
0.130
19 .....................
0.828
0.686
0.570
0.475
0.396
0.331
0.277
0.232
0.194
0.164
0.138
0.116
20 .....................
0.820
0.673
0.554
0.456
0.377
0.312
0.258
0.215
0.178
0.149
0.124
0.104
25 .....................
0.780
0.610
0.478
0.375
0.295
0.233
0.184
0.146
0.116
0.092
0.074
0.059
30 .....................
0.742
0.552
0.412
0.308
0.231
0.174
0.131
0.099
0.075
0.057
0.044
0.033
40 .....................
0.672
0.453
0.307
0.208
0.142
0.097
0.067
0.046
0.032
0.022
0.015
0.011
50 .....................
0.608
0.372
0.228
0.141
0.087
0.054
0.034
0.021
0.013
0.009
0.005
0.003
ppendix B (concluded) Present value of $1
Percent
Period
13%
14%
15%
16%
17%
18%
19%
20%
25%
30%
35%
40%
50%
1 ......................
0.885
0.877
0.870
0.862
0.855
0.847
0.840
0.833
0.800
0.769
0.741
0.714
0.667
2 ......................
0.783
0.769
0.756
0.743
0.731
0.718
0.706
0.694
0.640
0.592
0.549
0.510
0.444
3 ......................
0.693
0.675
0.658
0.641
0.624
0.609
0.593
0.579
0.512
0.455
0.406
0.364
0.296
4 ......................
0.613
0.592
0.572
0.552
0.534
0.515
0.499
0.482
0.410
0.350
0.301
0.260
0.198
5 ......................
0.543
0.519
0.497
0.476
0.456
0.437
0.419
0.402
0.328
0.269
0.223
0.186
0.132
6 ......................
0.480
0.456
0.432
0.410
0.390
0.370
0.352
0.335
0.262
0.207
0.165
0.133
0.088
7 ......................
0.425
0.400
0.376
0.354
0.333
0.314
0.296
0.279
0.210
0.159
0.122
0.095
0.059
8 ......................
0.376
0.351
0.327
0.305
0.285
0.266
0.249
0.233
0.168
0.123
0.091
0.068
0.039
9 ......................
0.333
0.308
0.284
0.263
0.243
0.225
0.209
0.194
0.134
0.094
0.067
0.048
0.026
10 .....................
0.295
0.270
0.247
0.227
0.208
0.191
0.176
0.162
0.107
0.073
0.050
0.035
0.017
11 .....................
0.261
0.237
0.215
0.195
0.178
0.162
0.148
0.135
0.086
0.056
0.037
0.025
0.012
12 .....................
0.231
0.208
0.187
0.168
0.152
0.137
0.124
0.112
0.069
0.043
0.027
0.018
0.008
13 .....................
0.204
0.182
0.163
0.145
0.130
0.116
0.104
0.093
0.055
0.033
0.020
0.013
0.005
14 .....................
0.181
0.160
0.141
0.125
0.111
0.099
0.088
0.078
0.044
0.025
0.015
0.009
0.003
15 .....................
0.160
0.140
0.123
0.108
0.095
0.084
0.074
0.065
0.035
0.020
0.011
0.006
0.002
16 .....................
0.141
0.123
0.107
0.093
0.081
0.071
0.062
0.054
0.028
0.015
0.008
0.005
0.002
17 .....................
0.125
0.108
0.093
0.080
0.069
0.060
0.052
0.045
0.023
0.012
0.006
0.003
0.001
18 .....................
0.111
0.095
0.081
0.069
0.059
0.051
0.044
0.038
0.018
0.009
0.005
0.002
0.001
19 .....................
0.098
0.083
0.070
0.060
0.051
0.043
0.037
0.031
0.014
0.007
0.003
0.002
0
20 .....................
0.087
0.073
0.061
0.051
0.043
0.037
0.031
0.026
0.012
0.005
0.002
0.001
0
25 .....................
0.047
0.038
0.030
0.024
0.020
0.016
0.013
0.010
0.004
0.001
0.001
0
0
30 .....................
0.026
0.020
0.015
0.012
0.009
0.007
0.005
0.004
0.001
0
0
0
0
40 .....................
0.008
0.005
0.004
0.003
0.002
0.001
0.001
0.001
0
0
0
0
0
50 .....................
0.002
0.001
0.001
0.001
0
0
0
0
0
0
0
0
0
Principal as a percentage of bond price_______
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th International Edition
1265533199, 978-1265533199
