Managerial Finance Assignment

Use the following table for problem 2.

Price the bonds from the above table with semi-annual coupon payments

Use the following table for problem

1. Par Value	Coupon Rate	Years to Maturity	Yield to Maturity	Price
   $1,000.00	8%	10	?	$1000.00
   $1,000.00	6%	10	?	$850.00

    

    What is the yield of the above bonds if interest (coupons) is paid semi-annually?

   What is the coupon rate for the bond listed below?

    

    

    

   Par Value	Coupon Rate	Years to Maturity	Yield to Maturity	Price	Coupon Frequency
   $1,000.00	?	25	10.0%	$1,182.56	Semi-Annual

    

   
   Moore Company is about to issue a bond with semi-annual coupon payments, a coupon rate of 8% and par value of $1,000. The yield-to-maturity for this bond is 10%.

   A.    What is the price of the bond if the bond matures in 5, 10, 15, or 20 years?

    

   B.     What do you notice about the price of the bond in relationship to the maturity of the bond?

    

    

    

   Les Company is about to issue a bond with semi-annual coupon payments, a coupon rate of 10% and par value of $1,000. The yield-to-maturity for this bond is 8%.

   a.       What is the price of the bond if the bond matures in 5, 10, 15, or 20 years?

    

   b.      What do you notice about the price of the bond in relationship to the maturity of the bond?

    

    Addison Company will issue a zero coupon bond this coming month. The projected yield for the bond is 7%. If the par value of the bond is $1,000 what is the price of the bond using a semi-annual convention if

   a.       The maturity is 20 years?

   b.      The maturity is 30 years?

   c.       The maturity is 50 years?

    

   d.      The maturity is 100 years?

    

   Filling in the missing information for the Wall Street Journal listing of corporate bonds in the table below. Assume that all bonds mature on December 31 of their listed year and that the bonds pay semi-annual coupons:

    

   Bond Prices as of December 31, 2003

    

   Bond	Yield	Volume	Close	Change
   AT&T 7 09	8.25%	125	?	0.25
   Honeywell zr 15	?	210	41.33	1.50
   Penney ? 23	8.50%	20	114.31	-1.00