ABC Ltd. has the following outstanding Bonds. Bond Series X Series Y Coupon 8% Variable changes annually comparable to prevailing rate Maturity 10 Years 10 Years Initially these bonds were issued at face value of Rs. 10,000 with yield to
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- Bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds?EZ Marketing Inc., has two bond issues outstanding, each with a par value of $1,000. Information about each is listed below. Suppose market interest rise 2 percentage point across the yield curve. What will be the change in price for each of the bonds? Does this tell us anything about the relationship between time to maturity and interest rate risk? (Bonds make annual coupon payments) Bond A: 5 years to maturity, 8 % coupon, market interest rate is 9 percent. Bond B: 12 years to maturity, 8% coupon, market interest rate is 9 percent.The cash price of a $1,000 bond that matures in exactly 18 months is $1001.74. Current continuously compounded spot (zero) interest rates are given in the table below. Maturity (months) Spot Rate (% p.a.) 3.30 3.60 ? 4.05 If the bond pays coupons semi-annually at the rate of 4% p.a., what is the missing spot (zero) rate? 6 12 18 24
- Bond P is a premium bond with a 10 percent coupon. Bond D is a 6 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 8 percent, and have five years to maturity. (Assume par value of K1,000)(i) What is the current yield for Bond P and Bond D?(ii) If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? For Bond D?(iii)Explain your answers and the interrelationship among the various types of yields.Graystone bonds have a maturity value of $1,000. The bonds carry a coupon rate of 12%. Interest is paid semiannually. The bonds will mature in 9 years. If the current market price is $976.50, What is the yield to maturity on the bond? b. What is the current yield on the bond? а.Glacier Industries has bonds on the market making annual payments, with 14 years to maturity, and selling for RM1,382.01. At this price, the bonds yield 7.5 percent. What is the coupon rate? Select one: A. 8.50 percent B. 12.00 percent C. 16.28 percent D. 10.50 percent
- Hassan Company bonds have 6 years left to maturity. Interest is paid annually, and the bonds have a Rs 10,000 par value and a coupon rate of 9%.a. What is the yield to maturity at a current market price of (1) Rs8829 and (2) Rs11, 104?NAMPAK has issued five-year bonds, with R1000 par value and a coupon interest rate of 12% paid semi-annually, if the required rate of return, YTM on similar risk bonds is 16%. A. R840 B. R866 C. R890 D. R910The following table is the current term structure of interest rates based on $1,000 par value zero-coupon bonds.( full process) Bonds Years to Maturity Yield to Maturity (%) A 1 6.00 B 2 7.50 C 3 7.99 D 4 8.49 (a) According to the expectations hypothesis, what is the expected 1-year interest rate 1 year from now in terms of the current term structure of interest rates? (b) According to the liquidity preference theory, is the expected 1-year interest rate 1 year from now higher or lower than the one obtained in (a)? Explain your answer. (c) At what price should Bond C sell for two years from now based on the implied forward interest rates derived from the current term structure of interest rates?