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Excel Finance. Any help would be great very confused 2) As an investor, you are considering an investment in the bonds of the Soccer Company.

Excel Finance. Any help would be great very confused
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2) As an investor, you are considering an investment in the bonds of the Soccer Company. The bonds, which pay interest semiannually, will mature in ten years, and have a coupon rate of 5.5% on a face value of $1,000. a) Assume your required return is 7% (market rate) for the bonds in this risk class, what is the highest price you would be willing to pay for the bond? (Use the PV function) b) What is the current yield of these bonds? c) If you bought the bond at the above calculated price and hold the bonds for one year, what total rate of return will you earn (assuming the market rate does not change)? Hint: You need to calculate the bond price one year ahead (note: in one year 9 years are left to maturity) and then compute the total return based on the capital gains/loss yield (in \%) and the current yield (in \%) from b). d) What is the yield to maturity on these bonds if you purchase them at the price calculated under a)? (Use the RATE function) e) If the bonds can be called in three years with a call premium of 3% of the face value, what is the yield to call on these bonds? (Use the RATE function) f) If the market interest rates remain unchanged, do you think it is likely that the bond will be called in three years? Why or why not? Future Value (includes call premium) Semiannual Coupon Payment Years to call 3 Bond Value (at time of purchase see a)) E) YTC F) If the market interest rates remain unchanged, do you think it is likely that the bond will be called in three years? Why or why not

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