Problem 5-01

Bond Valuation with Annual Payments

Jackson Corporation's bonds have 5 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 11%. The bonds have a yield to maturity of 7%. What is the current market price of these bonds? Round your answer to the nearest cent.

Problem 5-02

Yield to Maturity for Annual Payments

Wilson Wonders' bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a price of $850. What is their yield to maturity? Round your answer to two decimal places.

Problem 5-07

Bond Valuation with Semiannual Payments

Renfro Rentals has issued bonds that have a 8% coupon rate, payable semiannually. The bonds mature in 19 years, have a face value of $1,000, and a yield to maturity of 8%. What is the price of the bonds? Round your answer to the nearest cent.

Problem 5-08

Yield to Maturity and Call with Semiannual Payments

Thatcher Corporation's bonds will mature in 15 years. The bonds have a face value of $1,000 and an 7.5% coupon rate, paid semiannually. The price of the bonds is $900. The bonds are callable in 5 years at a call price of $1,050. Do not round off intermediate. Round your answers to two decimal places.

What is their yield to maturity?

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What is their yield to call?

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Problem 5-12 Bond Yields and Rates of Return

A 15-year, 14% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,075. The bond sells for $1,050. (Assume that the bond has just been issued.)

1. What is the bond's yield to maturity? Do not round your intermediate calculations. Round your answer to two decimal places. %
2. What is the bond's current yield? Do not round your intermediate calculations. Round your answer to two decimal places. %
3. What is the bond's capital gain or loss yield? Loss should be indicated with minus sign. Do not round your intermediate calculations. Round your answer to two decimal places. %
4. What is the bond's yield to call? Do not round your intermediate calculations. Round your answer to two decimal places. %

Problem 5-14 Current Yield with Semiannual Payments

A bond that matures in 7 years sells for $1,020. The bond has a face value of $1,000 and a yield to maturity of 10.5883%. The bond pays coupons semiannually. What is the bond's current yield? Do not round intermediate calculations. Round your answer to two decimal places.

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