Fi 515 Week 3 Homework

5-1 Bond paygrade with Annual Payments Jackson Corporations trusss bring on 12 years remaining to maturity date. engagement is nonrecreational one-yearly, the bonds take a leak a $1,000 par entertain, and the coupon interest station is 8%. The bonds have a pay to maturity of 9%. What is the legitimate market value of these bonds? P = F*r*[1 -(1+i)^-n]/i + C*(1+i)^-n, where F = light speed0. Since we are not given over the maturity value, we can assume that it is the same as the par value. So, C = grand piano. r = .08 i = .09 n = 12 The bond price is 1000*.08 * (1 - 1.09^-12)/.09 + 1000*1.09^-12 = $928.39 5-2 YTM for Annual Payments Wilson Wonders bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest come in is 10%. The bonds sell at a price of $850. What is their yield to maturity? Given: TTM = 12 years Par = $1,000 n = 12 PMT = 100 PV = -850 i = 12.4751% C = 10% ($ 100) cost = $850 PMT = 100 Yield to maturity = 12.48% 5-6 Maturity Risk Premiums The hearty safe rate is 3%, and inflation is expected to be 3% for the next 2 years. A 2-year Treasury protective covering yields 6.3%. What is the maturity risk premium for the 2-year security? r = r* +IP+DRP+LP+MRP 6.

2=%3% + 3% + 0 + 0 + MRP 5-7 Bond Valuation with Semi-Annual Payments Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds full-blown in 8 years, have a sheath value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? FV 1,000 PMT 50 N 16 R 4.25% Present prize = $1,085.80 5-13 Yield to Maturity and C! urrent Yield You just purchased a bond that matures in 5 years. The bond has a face value of $1,000 and has an 8% annual coupon. The bond has a current yield of 8.21%. What is the bonds yield to maturity? authoritative YIELD = ANNUAL voucher ÷ PV 0.0821 = 80 ÷ PV PV = 80 ÷ 0.0821 = 974.42 N = 5; PMT = 80; FV=1000; PV = 974.42 CPT I/Y I/Y = 8.65% 6-6 Beta and expected return If a connections...If you want to get a full essay, cabaret it on our website: BestEssayCheap.com

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