The following bond list is from the business section of a financial newspaper on January 1, 2016. Assume that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon and the coupon rate is in the column labeled Coupon. The Last Price and Last Yield columns indicate each bond's price and YTM at the end of trading. EST Spread indicates the band's spread above the relevant US Treasury benchmark, expressed as a percentage. UST indicates which US Treasury security maturity is the relevant benchmark for each bond. Est Volume shows the number of bonds traded during the day. Notice also that prices are stated relative to a par value of $100. Assume all bonds have the same default premium. Fill in the value of Kumatsu Co.'s bonds. Company Last Price Last Yield EST Spread Coupon 8.25% Maturity 01-01-2026 UST (Years) 10 Wernham Inc. $97.87 8.57% EST Volume (1000) 59.725 52,930 5.80% $99.22 5.98% 2.37% 0.58% 2.179 01-01-2021 01-01-2026 5 8.98% $104.07 10 Taggart Corp. Housing Co. Newtown Inc. Kumatsu Co. 46.932 45,120 9.63% 01-01-2046 8.37% 10.98% 6.26% $88.14 4.03% 30 4.13% 01-01-2021 0.86% 5 43,960 If you were to calculate the yield on a security $90.98 year US Treasury security, the yield will be equal to $92.86 Which bond is trading at a premium? $89.17 O Newtown Inc. $87.46 O Housing Co. Taggart Corp Kumatsu Co. The following bond list is from the business section of a financial newspaper on January 1, 2016. Assume that each bond shown matures on January 1 in 5, 10, or 30 years. Each bond shown pays a semiannual coupon and the coupon rate is in the column labeled Coupon. The Last Price and Last Yield columns indicate each bond's price and YTM at the end of trading. Est Spread indicates the bond's spread above the relevant US Treasury benchmark, expressed as a percentage. UST indicates which US Treasury security maturity is the relevant benchmark for each bond. EST Volume shows the number of bonds traded during the day. Notice also that prices are stated relative to a par value of $100. Assume all bonds have the same default premium. Fill in the value of Kumatsu Co.'s bonds. Last Price Company Wernham Inc. Coupon 8.25% 5.80% Maturity 01-01-2026 Last Yield 8.57% EST Spread 2.379 UST (Years) 10 $97.87 EST Volume (1000) 59,725 52,930 01-01-2021 $99.22 5.98% 0.58% 5 Taggart Corp. Housing Co. 8.98% 10 46,932 $104.07 $88.14 01-01-2026 01-01-2046 01-01-2021 8.37% 10.98% Newtown Inc. Kumatsu Co. 9.63% 4.13% 30 2.17% 4.03% 0.86% 45,120 43,960 6.26% 5 If you were to calculate the yield on a security with a 10-year US Treasury security, the yield will be equal to Which bond is trading at a premium? 6.20% 2.37% Newtown Inc. 2.17 O Housing Co. 4.309 Taggart Corp. Kumatsu Co
