Question
Please answer the 8 questions. Thank you! 1. Cullumber, Inc., has issued a three-year bond that pays a coupon rate of 9.4 percent. Coupon payments
Please answer the 8 questions. Thank you!
1. Cullumber, Inc., has issued a three-year bond that pays a coupon rate of 9.4 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.0 percent, what is the market value of the bond? Round answer to 2 decimal places
2. Ten-year zero coupon bonds issued by the U.S. Treasury have a face value of $1,000 and interest is compounded semiannually. If similar bonds in the market yield 11.6 percent, what is the value of these bonds? Round answer to 2 decimal places
3. Cullumber Real Estate Company management is planning to fund a development project by issuing 10-year zero coupon bonds with a face value of $1,000. Assuming semiannual compounding, what will be the price of these bonds if the appropriate discount rate is 12.8 percent? Round answer to 2 decimal places
4. Kevin Hall bought 10-year, 13.3 percent coupon bonds issued by the U.S. Treasury three years ago at $908.72. If he sells these bonds, for which he paid the face value of $1,000, at the current price of $819.92, what is his realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. (Round intermediate calculations to 5 decimal places and final answer to 2 decimal places)
5. Wildhorse Corp. management plans to issue seven-year zero coupon bonds. It has learned that these bonds will sell today at a price of $442.26. What is the yield to maturity on these bonds? Round answer to 3 decimal places
6. Pharoah, Inc., has four-year bonds outstanding that pay a coupon rate of 7.7 percent and make coupon payments semiannually. If these bonds are currently selling at $914.890.
A. What is the yield to maturity that an investor can expect to earn on these bonds? Round answer to 1 decimal place
Yield to maturity __ _ _ _ %
B. What is the effective annual yield? Round answer to 1 decimal place
Effective annual yield _ _ _ _ _ _ _ %
7. Michelle Walker is looking to invest in a three-year bond that makes semi-annual coupon payments at a rate of 5.225 percent. If these bonds have a market price of $990.00, what yield to maturity can she expect to earn?Round intermediate calculations to 5 decimal places and final answer to 2 decimal places
Yield to maturity __ _ _ _ %
8. Blossom, Inc., has outstanding bonds that will mature in six years and pay an 8 percent coupon semiannually. If you paid $1,004.76 today and your required rate of return was 7.1 percent. (Round intermediate calculations to 5 decimal places and final answer to 2 decimal places)
How much should you have paid for the bond? Worth of the bond $ _ _ _ _
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