Please help me answer these questions. 22.Assume that you have been researching corporate bonds issued by Target
Question:
Please help me answer these questions.
22.Assume that you have been researching corporate bonds issued by Target Corp. You are interested in the bond described below:
Par value $1,000
Coupon rate 6.5% per year
Payment schedule semiannual
Maturity date 12/15/2037
Market price 157.649 (% of par value)
Based on this listing, which of the following statements is/are true?
A. The Target bond has 35 coupon payments remaining until maturity.
B. The Target bond is selling at a premium.
C. Target bond is selling at a discount.
D. Both A and B are true.
E. Both A and C are true.
23.Refer to question #22 above. Based on the bond listing:
A. the bond's market price is $157.65.
B. the bond's market price is $1576.49.
C. the bond's market price is $15,764.90.
D. it is impossible to know the bond's market price based on this information.
E. none of the above is true.
24.Assume you are analyzing a corporate bond with the following characteristics:
Par value $1000
Coupon rate 8% per year
Payment schedule semiannual
Maturity 5 years.
If the market price for this bond is $950, then:
A. the yield-to-maturity will be less than 8%.
B. the yield-to-maturity will be more than 8%.
C. the yield-to-maturity will be equal to 8%.
D. the yield-to-maturity will be equal to $1000.
E. none of the above is true.
25.Refer to the bond described in #24 above. Assume that your required rate of return on this bond is 9.5% per year, compounded semiannually. With this required rate of return:
A. the value of the bond will be equal to $1000.
B. the value of the bond will be less than $1000.
C. the value of the bond will be greater than $1000.
D. it is impossible to judge the value of the bond based on the information given.
E. none of the above is true.