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Could someone help? 1. Paul pays $5 million for a 7-year lease of a building and rented it out. He will receive $1 million rental
Could someone help?
1. Paul pays $5 million for a 7-year lease of a building and rented it out. He will receive $1 million rental income at the end of the first and the second year, and will receive $1.2 million at the end of the remaining years. Calculate the internal rate of return of his investment. 2. Construct a bond amortization schedule for a $100 par value 2-year bond with 7% coupons paid semiannually, redeemable at par and bought to yield 4% per annum. 3. Fill in the missing values of the following bond amortization schedule for a $100 par value 2-year bond with semiannual coupons: Half- year Coupon payment Effective interest earned Amortized amount of premium Book value -1.05 -1.09 94.26 95.31 96.40 3.34 4. A $100 par value 8-year annual-coupon bond is redeemable at 105%. The coupon rate is 3% in the first 4 years and increases to 5% afterwards. Construct the amortization schedule for the bond in the 4th, 5th and 6th year, given that the price of the bond is $96.3. Hint: Set up a bond amortization schedule and then use Excel Solver. 5. A bond with par value of 1000 has payment dates of April 15 and October 15. The nominal coupon rate convertible semiannually is 7%. The bond matures on October 15, 2014. On April 15, 2012 a coupon payment of 35 was made. The bond is sold 80 days later on the settlement date of July 2012 to yield 6% convertible semiannually. Find the price-plus accrued, the accrued interest and the listed priceStep by Step Solution
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