Assignment: Twenty First Century Fox
Copy the quotations of two bonds issued by Twenty-First Century Fox that contain the Price.
Assume that par value of the bond is $1,000. What were the last prices of the bonds in $$ (listed in the Price column)? Show your work in your project.
Assume that par value of the bond is $1,000. Calculate annual coupon interest payments. Show your work in your project.
Assume that par value of the bond is $1,000. Calculate current yield of the bonds. Show your work in your project.
Assume that par value of the bond is $1,000. Assume semi-annual coupon payments. Calculate annual YTM of the bonds using the Price (listed in the column Price). (Round the number of years to the whole number). You should use Excel or financial calculator. Show your work. Please note that your answer will differ from the YTM in the last column because we round the number of years to the whole number.
Assuming that interest rates are expected to remain at their current level (as calculated in #5), calculate the prices of the bonds, the bonds' capital gains or losses with one-year holding period if you purchased the bonds today. Assume semi-annual coupon payments. Show your work.
Assume that the bonds can be called back in one year from today at 105% of face value. Calculate yield to call (round the number of years to the whole number).
a) If you are going to buy a bond issued Twenty First Century Fox, which bond would you choose?
b) If the bond that you chose is callable, will it change your decision to buy it?
c) If the interest rate will increase during the next years, how that will affect the price of your bond?