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Please ensure answers are clear when handwritten. Thanks Martin Shipping Lines issued bonds ten years ago at $1,000 per bond. The bonds had a 30-year
Please ensure answers are clear when handwritten. Thanks
Martin Shipping Lines issued bonds ten years ago at $1,000 per bond. The bonds had a 30-year life when issued, with semiannual payments at the then annual rate of 10 percent. This return was in line with required returns by bondholders at that point, as described below: 2x Real rate of return Inflation premium Risk premium 20 4 Total return 10x Assume that today the inflation premium is only 2 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds Compute the new price of the bond. Use Appendix B and Appendix D (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places. New price of the bond $ APPENDIX B Present Value of $1, PV PV = =Fvla +-) = FV(1 + i)* Period 2. 3 4 5 6. 7 8 9 10 11 12 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.6772 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 3% 0.971 0.943 0.915 0.885 0.863 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.681 0.661 0.642 0.623 0.605 0.587 0.570 0.554 0.478 0.412 4% 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.375 0.308 0.208 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.295 0.231 0.142 Percent 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.233 0.174 0.097 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.184 0.131 0.067 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0.215 0.146 0.099 0.016 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.116 0.075 0.032 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.092 0.057 0.022 11% 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 0.391 0.352 0.317 0.286 0.258 0.232 0.209 0.188 0.170 0.153 0.138 0.124 0.074 0.044 0.015 13 14 15 16 17 18 19 20 25 30. 40 0.307 ere to search O II 25....... 30 40 50 0.780 0.742 0.672 0.608 0.610 0.552 0.453 0.372 0.478 0.412 0.307 0.228 0.375 0.308 0.208 0.141 0.295 0.231 0.142 0.087 0.233 0.174 0.097 0.054 0.184 0.131 0,067 0.034 0.146 0.099 0.046 0.021 0.116 0.075 0.032 0.013 0.092 0.057 0.022 0.009 0.074 0.044 0.015 0.005 Period 1.... 2 3 4 5 6 7 8 9 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 022 10 11 12. 13 14 15 16 17 18 19 20 25 13% 0.885 0.783 0.693 0.613 0.543 0.480 0.425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.047 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.300 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.038 0.020 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.030 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.069 0.060 0.051 0.024 17% 0.855 0.731 0.624 0.534 0.456 0.390 0.333 0.285 0.243 0.208 0.178 0.152 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.043 0.020 10000 Percent 18% 0.847 0.718 0.609 0.515 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.016 0.007 19% 0.840 0.706 0.593 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0.052 0.044 0.037 0.031 0.013 0.00 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.010 25% 0.800 0.640 0.512 0.410 0.320 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.004 0001 30% 0.769 0.592 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0.073 0.056 0.043 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.001 0 35% 0.741 0.549 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.050 0.037 0.027 0.020 0.015 0.011 0.008 0.006 0.005 0.003 0.002 0.001 40% 0.714 0.510 0.364 0.260 0.186 0.133 0.095 0.068 0.048 0.035 0.025 0.018 0.013 0.009 0.006 0.005 0.003 0.002 0.002 0.001 0 0 0 0 0. 0 here to search > Appendix bipg (1079x1342) x + ezto-cf-media.mheducation.com/Media/Connect Production/bne/Ryerson/block11ce/Appendix_b.jpg eBay Facebook YouTube C Login with Centenn... . 3 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 4 0.636 0,613 0.592 0.572 0.552 0.534 0.515 0.499 5 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 6 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 7 0.452 0.125 0.400 0.376 0.354 0.333 0.314 0.296 8 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 9 0.361 0.333 0.300 0.284 0.263 0.243 0.225 0.209 10 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 11 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 12 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 13 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 14 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 15 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 16 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 17 0.146 0.125 0.108 0.093 0.080 0.069 0.060 0.052 18 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 19 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 20 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 25 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013 30. 0.033 0.026 0.020 0.015 0.012 0.009 0.007 0.005 40 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 50 0.003 0.002 0.001 0.001 0.001 0 0 0 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.010 0.004 0.001 0 0.512 0.410 0.320 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.004 0.001 0 0 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0,073 0.056 0.043 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.001 0 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.050 0.037 0.027 0.020 0.015 0.011 0.008 0.006 0.005 0.003 0.002 0.001 0 0 0 0.364 0.260 0.186 0.133 0.095 0.068 0.048 0.035 0.025 0.018 0.013 0.009 0.006 0.005 0.003 0.002 0.002 0.001 0 0 0 0 0.296 0.198 0.132 0.088 0.059 0.009 0.026 0.017 0.012 0.00B 0.005 0.003 0.002 0.002 0.001 0.001 0 0 0 Oo 0 0 0 Note: Factor calculation with calculator Sot PV-1 SetMT-0 Select number of required periods Select required interest rate Excel Spreadsheet PV 1.0 FV. 1 Docimal or 1 - For beginning of pened Sth spoo Go to Settings be here to search o BA E APPENDIX D Present Value of an Annuity of $1,PV. walio-0194 11% Period 1....... 2.. 3 5.. 6. 7 9. 10. 11 12 13 14.. 15... 16. 17.... 18.... 19 20 25 30 40 50 19 0.990 1.970 2.941 3.902 4.853 5.795 6.728 7.652 8.566 9.471 10.368 11.255 12.134 13.004 13.865 14.718 15.562 16.398 17.226 18.046 22.023 25.808 32.835 39.196 2% 0.980 1.942 2.884 3.808 4.713 5.601 6.472 7.325 8.162 8.983 9.787 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 19.523 22.396 27.355 31.424 3% 0.971 1.913 2.829 3.717 4.580 5.417 6.230 7.020 7.786 8.530 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.754 14.324 14.877 17.413 19.600 23.115 25.730 4% 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 8.111 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 15.622 17.292 19.793 21.482 5% 0.952 1.859 2.723 3,546 4.329 5.076 5.786 6.463 7.108 7.722 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 14.09 15.372 17.159 18.256 Percent 6% 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 7.887 8.384 8.853 9.295 9.712 10.106 10.477 10.828 11.158 11.470 12.783 13.765 15.016 15.762 7% 0.935 1.808 2.624 3.387 4.100 4.767 5.389 5.971 6.515 7.024 7.499 7.943 8.358 8.745 9.108 9.447 9.763 10.059 10.336 10.594 11.654 12.409 13.332 13.801 8% 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 10.675 11.258 11.925 12.233 9% 0.917 1.759 2.531 3.240 3.890 4.486 5.033 5.535 5.995 6.418 6.805 7.161 7.487 7.786 8.061 8.313 8.544 8.756 8.950 9.129 9.823 10.274 10.757 10.962 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 9.077 9.427 9.779 9.915 0.901 1.713 2.444 3.102 3.696 4.231 4.712 5.146 5.537 5.889 6.207 6.492 6.750 6.982 7.191 7-379 7.519 7.702 7.839 7.963 8.422 8.694 and 3.951 9.042 here to search UUTUL 17 18 19 20 25 30 40 50 15.562 16.398 17.226 18.046 22.023 25.808 32.835 39.196 Lug W CEL. 14.292 13.166 14.992 13.754 15.678 14.324 16.351 14.877 19.523 17.413 22.396 19.600 27.355 23.1115 31.424 25.730 12.166 12.659 13.134 13.590 15.622 17.292 19.793 21.482 11.274 11.690 12.085 12.462 14.094 15.372 17.159 18.256 10.477 10,828 11.158 11.470 12.783 13.765 15.046 15.762 9.763 10.059 10.336 10,594 11.654 12.409 13.332 13.801 9.122 9.372 9.604 9.818 10.675 11.258 11.925 12.233 8.544 8.756 8.950 9.129 9.823 10.274 10.757 10.962 8.022 8.201 8.365 8.514 9.077 9.427 9.779 9.915 7.549 7.702 7,839 7.963 8.422 8.694 8.951 9.042 Period 40% 2... 12% 0.893 1.690 2.402 3.037 3.605 4 5. 6 7 8... 9 13% 0.885 1.668 2.361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 724025 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.102 7.250 7.366 77469 10... 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.112 6.265 6.373 6.467 6.550 6.623 15% 0.870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.602 4.833 5.029 5.197 5.342 5.466 5.575 5.668 5.749 5.818 5.877 5929 Percent 17% 18% 19% 0.855 0.847 0.840 1.585 1.566 1.547 2.210 2.174 2.140 2.743 2.690 2.639 3.199 3.127 3.058 3.589 3.498 3.410 3.922 3.812 3.706 4.207 4.078 3.954 4.451 4.303 4.163 4.659 4.494 4.339 4.836 4.656 4.486 4.988 4.793 4.611 5.118 4.910 4.715 5.229 5.000 4.802 5.324 5.092 4.876 5.405 5.162 4.938 5.475 5.222 4.988 5.534 5.273 5.033 5.584 5.316 5.070 5.62853 50 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.813 970 25% 0.800 1.440 1.952 2.362 2.689 2.951 3.161 3.329 3.463 3.571 3.656 3.725 3.780 3.824 3.859 3.387 3.910 3.928 3.942 3.954 30% 0.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3.249 3.268 3.283 3.295 3.304 3.311 3316 35% 0.741 1.289 1.696 1.997 2.220 2.385 2.508 2.598 2.665 2.715 2.752 2.779 2.799 2.814 2.825 2.834 2.8.10 2.8414 2.818 0.714 1.224 1.589 1.849 2.035 2.168 2.263 2.331 2.379 2.414 2.438 2.156 2.469 2.478 2.484 2.189 2.492 2.194 2.496 2297 50% 0.667 1.111 1.407 1.605 1.737 1.824 1.883 1.922 1.918 1.965 1.977 1.985 1.990 1.993 1.995 1.997 1.998 ndows 1.999 b activate 1.999 1.999 11. 12... 13. 14. 15 16 17 18 19 20 e to search 0.741 2 3 U.235 1.GA 2361 0.877 1.647 2322 4. 5 6. 7 8 9 10 11 12. 13 14 15 16 17 18. 19 U.245 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.102 7.250 7.366 7.469 7.843 8.055 8.244 8.304 2.974 3.517 3.998 423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 7.330 7.496 7.634 7.675 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.873 7.003 7.105 7.133 0.87U 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5,583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 6.464 6.566 6.642 6.661 UR 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.668 5.749 5.818 5.877 5.929 6.097 6.177 6.233 6.246 0.055 1.585 2.210 2.743 3.199 3.589 3.922 4.207 4.451 4.659 4.836 4.988 5.118 5.229 5.324 5.405 5.475 5.534 5.584 5.628 5.766 5.829 5.871 5.880 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 4.656 4.793 4.910 5.008 5.092 5.162 5.222 5.273 5.316 5.353 5.467 5.517 5.548 5.554 U.SI 1.547 2.140 2.639 3.058 3.410 3.706 3.954 4.163 4.339 4.486 4.611 4.715 4.802 4.876 4.938 4.988 5.033 5.070 5.101 5.195 5.235 5.258 5.262 U.255 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.843 4.870 4.948 4.979 4.997 4.999 0.00 1410 1.952 2.362 2.689 2.951 3.161 3.329 3.463 3.571 3.656 3.725 3.780 3.824 3.859 3.887 3.910 3.928 3.942 3.954 3.985 3.995 3.999 4.000 U.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3.249 3.268 3.283 3.295 3.304 3.311 3.316 3.329 3.332 3.333 3.333 1.289 1.696 1.997 2.220 2.385 2.508 2.598 2.665 2.715 2.752 2.779 2.799 2.814 2.825 2.834 2.840 2.844 2.848 2.850 2.856 2.857 2.857 2.857 0.714 1.224 1.589 1.849 2.035 2.168 2.263 2.331 2.379 2.414 2.438 2.456 2.469 2.478 2.484 2.489 2.492 2.494 2.496 2.497 2.499 2.500 2.500 2.500 U.657 1.111 1.407 1.605 1.737 1.824 1.883 1.922 1.948 1.965 1.977 1.985 1.990 1.993 1.995 1.997 1.998 1.999 1.999 1.999 2.000 2.000 2.000 2.000 20... 25. 30. 40 50 annuity in advance calculate factor with BGN Sot on calcul Note: Factor calculation with calculator Set PVT -1 Set PV - 0 Select number of required periods Select required interest rate Excel Spreadsheet PV. O. PMTO) I Decimal or 1 - For beginning of period (5th spot) Acuvate Wind Serndsba to search o Step by Step Solution
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