- +44 141 628 6080
- info@tutorsglobe.com

Corporate bond valuation

1.Valuation - corporate bond

A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)?

2.Valuation - options

The following information refers to a six-month call option on the stock of XYZ, Inc.

•Price of the underlying stock: $50.

•Strike price of the three-month call: $45.

•Market price of the option: $10.

a) What is the intrinsic value of the option?

b) What is the option's time premium at this price?

3.Valuation - zero-coupon bond

A U.S. Government bond with a face amount of $10,000 with 13 years to maturity is yielding 5.5%. What is the current selling price?

4.A share of stock is currently selling for $31.80. If the anticipated constant growth rate for dividends is 6% and investors are seeking a 16% return, what is the dividend just paid?

5.A $1000 value convertible bond with conversion price of $50. It sells for $1,120 despite the fact bond's coupon ate and the market rate are equal. The common stock acquired upon conversion is selling for $54 per share. What is the convertible bond's conversion premium?

Expected delivery within 24 Hours

1923513

Questions

Asked

3,689

Active Tutors

1445857

Questions

Answered

**
Start Excelling in your courses, Ask a tutor for help and get answers for your problems !! **

©TutorsGlobe All rights reserved 2022-2023.

## Q : Find bid on the treasury bills

We are currently bidding on Treasury bills and have determined that we must have a 5% return for a $1,000 T-Bill that will mature in one year. How much would we be willing to bid on the Treasury bill?