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FIN 571 Week 4 Connect Problems

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FIN 571 Week 4 Connect Problems
Q-1
Even though most corporate bonds in the United States make coupon
payments semiannually, bonds issued elsewhere often have annual
coupon payments. Suppose a German company issues a bond with a par
value of €1,000, 20 years to maturity, and a coupon rate of 7 percent paid
annually.
If the yield to maturity is 8.1 percent, what is the current price of the bond?
(Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
Q-1 (Set 2)
Watters Umbrella Corp. issued 30-year bonds 2 years ago at a coupon
rate of 7.4 percent. The bonds make semiannual payments. If these bonds
currently sell for 83 percent of par value, what is the YTM? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
2.Microhard has issued a bond with the following characteristics:
Par: $1,000
Time to maturity: 15 years
Coupon rate: 11 percent
Semiannual payments
Calculate the price of this bond if the YTM is (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g., 32.16.):
Q-2 (Set 2)
Union Local School District has bonds outstanding with a coupon rate of
3.7 percent paid semiannually and 15 years to maturity. The yield to
maturity on these bonds is 4.3 percent and the bonds have a par value of
$5,000.
What is the dollar price of the bond? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)