Business, 04.04.2020 12:04 angellll4455

Use the following corporate bond quote information to answer the questions that follow. Since this is a corporate bond,
assume the company makes semi-annual coupon payments and also assume the bond matures on today’s date in its
maturity year.
Bond Cur. Yld. Vol. Close Net Chg.
Doh! 9 ½ 18 9.0 5 105 1/2 - 1/4
Doh! 8 ½ 21 9.4 10 90 1/4 -1/2
1. How much would each bond cost you to buy today if its face value is $1000?
2. How much would each bond cost you yesterday if its face value were $1000?
3. What is each bond’s yield to maturity?
4. What is each bond’s expected capital gains yield today?
5. Now imagine you purchased each bond today at the current price. A year later the yield to maturity for each
bond falls by one percentage point. What is your total rate of return for each bond?
6. Now imagine the same scenario in #5 (the last question) except the yield to maturity for each bond increases
one percentage point for each bond a year later. What is your total rate of return for each bond?
7. Which bond do you prefer in #5, and what type of risk are you more exposed to if you choose this particular
bond?
8. Which bond do you prefer in #6, and what type of risk are you more exposed to if you choose this particular
bond?

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 12:20

Bdj co. wants to issue new 22-year bonds for some much-needed expansion projects. the company currently has 9.2 percent coupon bonds on the market that sell for $1,132, make semiannual payments, have a $1,000 par value, and mature in 22 years. what coupon rate should the company set on its new bonds if it wants them to sell at par?

Answers: 3

Answer

Business, 22.06.2019 18:00

Carlton industries is considering a new project that they plan to price at $74.00 per unit. the variable costs are estimated at $39.22 per unit and total fixed costs are estimated at $12,085. the initial investment required is $8,000 and the project has an estimated life of 4 years. the firm requires a return of 8 percent. ignore the effect of taxes. what is the degree of operating leverage at the financial break-even level of output?

Answers: 3

Answer

Business, 22.06.2019 19:30

About 20 years ago, sturdy light, inc., produced a sturdy, lightweight backpack in a market that was rapidly growing. sturdy light became a leader in this market. eventually, the backpack market reached the maturity stage and slowed down. however, by this time, sturdy light had developed a strong brand name and continued to steadily lead the market. which of the following describes this scenario? a. sturdy light was a star that developed into a cash cow. b. sturdy light was a question mark that developed into a star. c. sturdy light was a dog that developed into a question mark. d. sturdy light was a cash cow that developed into a star.

Answers: 2

Answer

Business, 22.06.2019 19:40

An increase in the market price of men's haircuts, from $16 per haircut to $26 per haircut, initially causes a local barbershop to have its employees work overtime to increase the number of daily haircuts provided from 20 to 25. when the $26 market price remains unchanged for several weeks and all other things remain equal as well, the barbershop hires additional employees and provides 40 haircuts per day. what is the short-run price elasticity of supply? nothing (your answer should have two decimal places.) what is the long-run price elasticity of supply? nothing (your answer should have two decimal places.)

Answers: 1

Answer

You know the right answer?

Use the following corporate bond quote information to answer the questions that follow. Since this i...

Questions