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Bond Valuation and Stock Valuation Coursework Assignment (Coursework Sample)

Instructions:

 Writing assignments (Due Saturday as a Word or Excel file) Show ALL work

Hope Corporation bonds bearing a coupon rate of 12%, pay coupons semiannually, have 3 years remaining to maturity, and are currently priced at $940 per bond. What is the yield to maturity?

George, Inc. bonds have a face value of $1,000 and a 9% coupon paid semiannually; the bonds mature in 8 years. What current yield would be reported in The Wall Street Journal if the yield to maturity is 7%?

On January 1, 2004, Pearce and Co. will issue new bonds to finance its expansion plans. Currently outstanding 9%, January 1, 2020 Pearce and Co. bonds are selling for $1,141. If interest is paid semiannually for both bonds, what must the coupon rate of the new bonds be in order for the issue to sell at par?

Assume there is a 12-year, 9.5% semiannual coupon bond, with a par value of $1,000. The bond sells for $1,152.

What is the bond’s yield to maturity (YTM)?

What is the bond’s current yield?

A zero-coupon bond with a par value of $1,000 has 15 years to maturity. If the YTM is 6.2%, what is the current price this bond?

One year ago, Blazer, Inc. issued 17-year bonds at par. The bonds have a coupon rate of 6 percent and pay interest annually. Today, the market rate of interest on these bonds is 8.2 percent. How does the price of these bonds today compare to the issue price (what is the percentage difference and is it higher or lower)?

Today is January 1, 2012 and you are considering purchasing an outstanding bond that was issued on January 1, 2010. It has a 9% annual coupon and originally had a 20-year maturity. The bonds can be called for 5 years from original issue date at a premium of $1085. Interest 
rates have declined and the bonds are currently selling for 112% of par. Calculate the YTM and the YTC.

8. If the following bonds are identical except for coupon & price, what is the coupon of bond B?

source..
Content:

Bond Valuation and Stock Valuation
Name
Institution
Date
Writing assignments (Due Saturday as a Word or Excel file) Show ALL work
Hope Corporation bonds bearing a coupon rate of 12%, pay coupons semiannually, have 3 years remaining to maturity, and are currently priced at $940 per bond. What is the yield to maturity? 

C=Coupon/ interest rate= 120
F= Face value=1000
P= Price= 940
N= years to maturity = 3years semiannually
YTM= C+ (F-P)/ n/ (F+P/2)
B0=C/2(1-(1+YTM)/2-2t/ (YTM/2) + F/ (1+YTM/2)2t
YTM= 120+ ($1,000-940)/3*2/ (1000+940)/2= 130/940
940= $60{[1 - 1/ (1 + R) 6] / R} + 1,000 / (1 + R) 6; R = 7.27%, then YTM = 7.27%*2= 14.54%
George, Inc. bonds have a face value of $1,000 and a 9% coupon paid semiannually; the bonds mature in 8 years. What current yield would be reported in The Wall Street Journal if the yield to maturity is 7%?
FV=1,000
PMT- payment = (9%*1000)/2=45
N=8* 2=16
PV/ market price =1120.94
Coupon=90
Current yield= 90/1120.94=8%
On January 1, 2004, Pearce and Co. will issue new bonds to finance its expansion plans. Currently outstanding 9%, January 1, 2020 Pearce and Co. bonds are selling for $1,141. If interest is paid semiannually for both bonds, what must the coupon rate of the new bonds be in order for the issue to sell at par? 

Bond price $1,141
Face value $ 1,000
And the Coupon rate is 9%
Assume there is a 12-year, 9.5% semiannual coupon bond, with a par value of $1,000. The bond sells for $1,152.
What is the bond’s yield to maturity (YTM)? 

1152= $47.50{[1 - 1/ (1 + R) 24] / R} + 1,000 / (1 + R) 24; R = 15.10%, then YTM=7.55%
What is the bond’s current yield? 

Bond current yield= 95/$1,152= 8.25%
A zero-coupon bond with a par value of $1,000 has 15 years to maturity. If the YTM is 6.2%, what is the current price this bond? 

FV=1,000
N=15
YTM=6.2%
P = 1,000*0.062 %{[1 - 1/ (1 + 0.062) 15] / R} + 1,000 / (1 + 0.062) 15;= $ 405.632
One year ago, Blazer, Inc. issued 17-year bonds at par. The bonds have a coupon rate of 6 percent and pay interest annually. Today, the market rate of interest on these bonds is 8.2 percent. How does the price of these bonds today compare to the issue price (what is the percentage difference and is it higher or lower)? 

Price= $ 60[(1-1/1.082 17 + 1,000/ 1.082 17= $801.97
The price is lower and difference is $ 198.03
Today is January 1, 2012 and you are considering purchasing an outstanding bond that was issued on January 1, 2010. It has a 9% annual coupon and originally had a 20-year maturity. The bonds can be called for 5 years from original issue date at a premium of $1085. Interest 
rates have declined and the bonds are currently selli...
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