Question 1:
(Bond valuation) Calculate the value of a bond that matures in 12 years and has $1,000 par value. The annual coupon interest rate is 9 percent and the markers required yield to maturity on a comparable-risk bond is 12 percent. Round to the nearest cent.
The value of the bond is___.
Question 2:
(Bond valuation) Enterprise, Inc. bonds have an annual coupon rate of 11 percent. The interest is paid semiannually and the bonds mature in 9 years. Their par value is $1,000. If the market's required yield to maturity on a comparable-risk bond is 14 percent, what is the value of the bond? What is its value if the interest is paid annually and semiannually? (Round to the nearest cent.)
a. The value of the Enterprise bonds if the interest is paid semiannually is___.
b. The value of the Enterprise bonds if the interest is paid annually is___.
Question 3:
(Yield to maturity) The market price is $750 for a 20-year bond (S ,000 par value) that pays 9 percent annual interest, but makes interest payments on a semiannual basis (4.5 percent semiannually). What is the bond's yield to maturity? (Round to two decimal places.
The bond's yield to maturity is___.
Question 4: (Yield to maturity) A bond's market price is S950. It has a S1,000 par value, will mature in 14 years, and has a coupon interest rate of 8 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 28 years? What if it matures in 7 years? (Round to two decimal places.)
The bond's yield to maturity if it matures in 14 years is The bond's yield to maturity if it matures in 28 years is The bond's yield to maturity if it matures in 7 years is___.
Question 5:
(Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70 in interest, with a $1,000 par value and matures in 25 years. The markers required yield to maturity on a comparable-risk bond is 8 percent. (Round to the nearest cent.) For questions with two answer options (e.g. increase/decrease) choose the best answer and write it in the answer block.
Question
a. What is the value of the bond if the markers required yield to maturity on a comparable-risk bond is 8 percent?
b. What is the value of the bond if the markers required yield to maturity on a comparable-risk bond increases to 11 percent?