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Question #4 a. Company A's bond has a current price of $950, a maturity value of $1,000, and matures in 8 years. If interest is
Question #4 a. Company A's bond has a current price of $950, a maturity value of $1,000, and matures in 8 years. If interest is paid semi-annually and the bond is priced to yield 5%, what is the bond's annual coupon rate? b. Company B's bond has a 6% coupon rate (with interest paid semi-annually), a par value of $1,000, and matures in 10 years. If the bond is priced to yield 5%, what is the bond's current price? C. Company C's bond has an 6% coupon rate (semi-annual interest), a maturity value of $1,000, matures in 5 years, and a current price of $9,75. What is the bond's yield-to-maturity? d. A 20-year, $1,000 par value bond has an 10% annual coupon. The bond currently sells for $875. If the yield to maturity remains at its current rate, what will the price be 10 years from now? e. One year ago a corporation issued 20-year, noncallable, 5% annual coupon bonds at their par value of $1,000. Coupon payments are made every six month. Today, the market interest rate on these bonds is 7.5%. What is the current price of the bonds, given that they now have 19 years to maturity
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