Business, 23.04.2021 17:10 destinyhammons12345

Five years ago Tosev Inc. issued 30-year, $1,000 par value, semi-annual coupon bonds with a coupon rate of 9.10 percent. The bonds originally sold at a price of $1,010.32 per bond. Currently, those bonds have a market price of $1,118.15 per bond. The Chief Financial Officer of Tosev is currently considering issuing new bonds. These bonds will have a par value of $1,000, semi-annual coupon payments, a term of 25 years and a coupon rate of 8 percent. Due to differences in the legal provisions of the bonds, the Chief Financial Officer estimates that the yield to maturity on the new bonds will be one percent higher than the current yield to maturity on the old bonds. Based on the Chief Financial Officer's estimate, what would be the price per bond of the new bonds today? A. $ 817.44
B. $ 896.67
C. $ 901.19
D. $1,000.00
E. $1,118.15
Which of the following statements is most correct?
A. If a bond's yield to maturity exceeds its annual coupon rate, then the bond will be trading at a premium.
B. If interest rates increase, the relative price change of a 10-year coupon bond will be greater than the relative price change of a 10-year zero coupon bond.
C. If a coupon bond is selling at par, its current yield equals its yield to maturity. (Hint: a bond's current yield equals annual coupon payment divided by current price).
D. Both a and c are correct.
E. None of the answers above is correct.

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 04:40

Who has summer school : ( because i do : (

Answers: 1

Answer

Business, 22.06.2019 15:00

Beagle autos is known for its affordable and reliable brand of consumer vehicles. because its shareholders expect to see an improved rate of growth in the coming years, beagle's executives have decided to diversify the company's range of products so that at least 40 percent of the firm's revenue is generated by new business units. however, the company's resources, capabilities, and competencies are limited to producing other forms of motorized vehicles, such as motorcycles and all-terrain vehicles (atvs). which type of corporate diversification strategy should beagle pursue?

Answers: 1

Answer

Business, 22.06.2019 17:00

Which represents a surplus in the market? a market price equals equilibrium price. b quantity supplied is greater than quantity demanded. c market price is less than equilibrium price. d quantity supplied equals quantity demanded.

Answers: 2

Answer

Business, 22.06.2019 18:30

Amanufacturer has paid an engineering firm $200,000 to design a new plant, and it will cost another $2 million to build the plant. in the meantime, however, the manufacturer has learned of a foreign company that offers to build an equivalent plant for $2,100,000. what should the manufacturer do?

Answers: 1

Answer

You know the right answer?

Five years ago Tosev Inc. issued 30-year, $1,000 par value, semi-annual coupon bonds with a coupon r...

Questions