what is the expected rate for each bond?

what is the expected rate of return for the bonds

Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking bboul these bonds. Answer the following questions a. Assuming interest is paid annually, calculate the values of the bonds if your required rates of return are as follows: Microsoft, 8 percent; GE Capital, 18 percent; and Morgan Stanley, 9 percent, where: b. The bonds are selling for the following amounts: Microsoft $650 GE Capital $284 Morgan Stanley $1,079 What are the expected rates of retum for each bond? c. How would the value of the bonds change if (1) your required rate of return (ro) increased 2 percentage points or (2) decreased 2 percentage points ? a. If your required rate of return on the Microsoft bond is 8 percent, what is the value of the bond? $ 723.72 (Round to the nearest cent.) If your required rate of return on the GE Capital bond is 18 percent, what is the value of the bond? $ 371.31 (Round to the nearest cent.) If your required rate of return on the Morgan Stanley bond is 9 percent, what is the value of the bond? $ 1000 (Round to the nearest cent.) b. What is the expected rate of return for the Microsoft bond? 53.85% (Round to two decimal places.) He 3.000 person med by Micromol, Old Morgan Basey Asume you to hate bonde. Awewe Alternate them the border your end rates of rotumwa tuw. Meronok, percent of Capt. 1 percent, wd Morgan percent we strong amount Microsoft 1960 DEC 3214 May 11.000 What are the expected to retum reach bond C. Howed a hot change your needs of the pentage poets or lowered2 percentage port? 1. Expanthenon of your write of tot openmonts, and stone Show you buy bonds Explan Review MICROSOFT GE CAPITAL MORGAN STANLEY More 5.50 650 DO 25 15 monocomandopy All you need to more Microt boni peront what is the value of the Bond? 3. the recent your required the ofrem o God is 18 percent, what is the value of the bond? found to the neare cent your required nune, o ratum en the Morgan Stanley bota percent what the sun of the boner 1000 usd to the new Vedle of return for their bond? antowe Georo) Done