The day before the Federal Reserve Bank increased the Fed Funds rate by 0.25 %, menswear company Hayden Threads raised $100 million by issuing bonds with par value of $100million, an annually paid coupon of 7.5%, and 20 years to maturity. Use this information to answer the following two questions. Use the Fed's rate increase to calculate the elasicity of this bond issue. Answer is -.7503. I need to through steps
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- Laura Hall is planning to buy 10-year zero coupon bonds issued by the U.S. Treasury. If these bonds have a face value of $1,000 and are currently selling at $409.39, what is the expected return on them? Assume that interest compounds semiannually on similar coupon paying bonds. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.)The Pharoah Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 10.425 percent. The current market rate for similar securities is 10.30 percent. Assume that the face value of the bond is $1,000. Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Problem 8.29 a-d (Excel Video)(a) ✓ Your answer is correct. What is the current market value of one of these bonds? (Round answer to 2 decimal places, e.g. 15.25.) Current market value $ eTextbook and Media Using multiple attempts will impact your score. 50% score reduction after attempt 2 Problem 8.29 a-d (Excel Video)(b) ✓ Your answer…The Pharoah Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 10.425 percent. The current market rate for similar securities is 10.30 percent. Assume that the face value of the bond is $1,000. Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Problem 8.29 a-d (Excel Video)(a) Your answer is incorrect. What is the current market value of one of these bonds? (Round answer to 2 decimal places, e.g. 15.25.) Current market value $
- Answer the following question step by step using a financial calculator. Show all working: XYZ Inc. issued 20-yr bonds which pay semi-annual coupons of $60 and is currently selling at $1,000. The firm has decided to raise new funds using bond financing with maturity of 10 years, par value of $1,000 and semi-annual coupons of $80. How many new bonds must XYZ Inc. issue to raise a sum of $10,000,000 in case if we assume that both bonds have the same interest rate. Rounded to the nearest whole number.Answer the following question using a financial calculator: XYZ Inc. issued 20-yr bonds which pay semi-annual coupons of $60 and is currently selling at $1,000. The firm has decided to raise new funds using bond financing with maturity of 10 years, par value of $1,000 and semi-annual coupons of $80. How many new bonds must XYZ Inc. issueto raise a sum of $10,000,000 in case if we assume that both bonds have the same interest rate.Rounded to the nearest whole number.Luther Industries needs to raise $25 million to fund a new office complex. The company plans on issuing ten-year bonds with a face value of $1000 and a coupon rate of 6.5% (annual payments). The following table summarizes the YTM for similar ten-year corporate bonds of various credit ratings: Rating AAA AA A ВВВ BB YTM 6.6% 6.8% 6.9% 7.3% 7.8% Assuming that Luther's bonds receive a AAA rating, the number of bonds that Luther must issue to raise the needed $25 million is closest to: OA. 30,216 B. 25180 OC. 35,252 OD. 20,144
- Use the information for the question(s) below. Luther Industries needs to raise $25 million to fund a new office complex. The company plans on issuing ten - year bonds with a face value of $1000 and a coupon rate of 7.0% (annual payments). The following table summarizes the YTM for similar ten - year corporate bonds of various credit ratings: Rating AAA AA A BBB BB YTM 6.70% 6.80% 7.00% 7.40% 8.00% Assuming that Luther's bonds receive a AAA rating, the price of the bonds will be closest to: O A. $937 O B. $1021 OC. $1014 O D. $1000I need assistance with these concepts: When interest rates ________ the market required rates of return ______ and the bond prices will _________ . XYZ Inc. issued 20-yr bonds which pay semi-annual coupons of $60 and is currently selling at $1,000. The firm has decided to raise new funds using bond financing with maturity of 10 years, par value of $1,000 and semi-annual coupons of $80. How many new bonds must XYZ Inc. issue to raise a sum of $10,000,000 in case if we assume that both bonds have the same interest rate. Rounded to the nearest whole number. The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon. The 6 percent annual coupon bonds matures in 2035, and it is now 2020. Interest on these bonds is paid annually on December 31 of each year, and new annual coupon bonds with similar risk and maturity are currently yielding 10 percent. How much should Karen sell her bonds today? Your best friend Sam is in discussion with you about saving…The Wildhorse Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 10.375 percent. The current market rate for similar securities is 10.50 percent. Assume that the face value of the bond is $1.000. Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Problem 8.29 a-d (Excel Video)(a) What is the current market value of one of these bonds? (Round answer to 2 decimal places, eg. 15.25) Current market value
- Luther Industries needs to raise $25 million to fund a new office complex. The company plans on issuing ten-year bonds with a face value of $1000 and a coupon rate of 6.6% (annual payments). The following table summarizes the YTM for similar ten-year corporate bonds of various credit ratings: Rating AAA AA A BBB BB YTM 6.73% 6.93% 7.03% 7.43% 7.93% Assuming that Luther's bonds receive a AAA rating, the price of the bonds will be closest to: O A. $1,189 O B. $1,387 O C. $991 O D. $793In May 2000, the U.S. Treasury issued 30-year bonds with a coupon rate of 6.25%, paid semi-annually. A bond with a face value of $1,000 pays $31.25 (1,000 × 0.0625 / 2) every six months for the next 30 years; in May 2030, the bond also repays the principal amount, $1,000. 1. What is the value of the bond if, immediately after issue in May 2000, the 30-year interest rate increases to 7.5%? 2. What is the value of the bond if, immediately after issue in May 2000, the 30-year interest rate decreases to 5.0%? 3. On a graph in Excel, show how the value of the bond changes as the interest rate changes (plot the value as a function of the interest rate). At what interest rate is the value of the bond equal to its face value of $1,000?A bond of $40,000 was issued by the Central Bank on August 17, 2012, with a 30-year maturity. The coupon rate was 3.7% compounded semi-annually. If you want to purchase this bond today: 1. What cash price does it have, when prevailing market rates today are 5.2% compounded semi-annually? 2. What is the amount of the bond premium or discount? 3. What is the amount of the payment that you would receive every six months?