Question
The Walt Disney Company (DIS) has an outstanding bond with a 8.5% annual coupon rate and a 6.3% yield to maturity (YTM). The par value
The Walt Disney Company (DIS) has an outstanding bond with a 8.5% annual coupon rate and a 6.3% yield to maturity (YTM). The par value is $1000, and there are 10 years left until maturity. 1. In cells F11-F20, calculate the payment for each period, and in F21, calculate the total payments. 2. In cells G11-G20, calculate the present value of the payment for each period, and in G21, calculate the total present value of payments (which is the current price). 3. In cells H11-H20, calculate the % (or weight) of the total bond price for each of the cash flow present values, and in H21, check that the total weights equals 100%. 4. In cells K11-K20, multiply the weights from step 3 by the year, and in K21, calculate the duration of the bond. 5. In cell K22, calculate the modified duration of the bond. 6. In cells M11-M20, calculate the year plus the year squared for each time period. 7. In cells N11-N20, multiply the values from column M by the present value of cash flow payments in column G. In cell N21, calculate the sum of N11-N20, and in N22 calculate the convexity of the bond.
Please show work for each cell!
ns: The Walt Disney Company (DIS) has an outstanding bond with a 8.5% annual coupon rate and a 6.3% yield to maturity (YTM). The par value is $1000, and there are 10 years left until maturity. 1. In cells F11-F20, calculate the payment for each period, and in F21, calculate the total payments. 2. In cells G11-G20, calculate the present value of the payment for each period, and in G21, calculate the total present value of payments (which is the current price). 3. In cells H11-H20, calculate the \% (or weight) of the total bond price for each of the cash flow present values, and in H21, check that the total weights equals 100%. 4. In cells K11-K20, multiply the weights from step 3 by the year, and in K21, calculate the duration of the bond. 5. In cell K22, calculate the modified duration of the bond. 6. In cells M11-M20, calculate the year plus the year squared for each time periodStep by Step Solution
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