Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use this table to answer the following questions: Amount issued $ 2 8 0 million Offered Issued at a price of 9 8 . 5

Use this table to answer the following questions:
Amount issued $ 280 million
Offered Issued at a price of 98.500% plus accrued interest (proceeds to company 98.717%) through Citi and JPMorgan
Interest 6.85% per annum payable June 15 and December 15.
Maturity June 15,2041
Denomination, face value, or principal $ 1,000
Callable Remaining payments discounted at the treasury rate +30 basis points
AMAT decides to call the bond one year before it is due to expire. The interest rate on one-year Treasury bonds is 2.85%. What price per bond must AMAT pay to call the bonds?
Note: Do not round your intermediate calculations. Enter your answers in dollars, rather than in millions of dollars, rounded to 2 decimal places.
If the interest rate on Treasury bonds is 11.85%. What price per bond must AMAT pay to call its bonds? (Hint: AMAT will pay the greater value between the par value and the PV of remaining payments)
Note: Do not round your intermediate calculations. Enter your answers in dollars, rather than in millions of dollars, rounded to 2 decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance And Financial Intermediation

Authors: Harold L. Cole

1st Edition

0190941707, 978-0190941703

More Books

Students also viewed these Finance questions

Question

=+ (d) Show that \, (He 0) =0 and A*(H) =1.

Answered: 1 week ago

Question

Prepare and properly label figures and tables for written reports.

Answered: 1 week ago