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What is the present value of $2,000 per year for 8 years discounted back to the present at 10 percent?
The present value of $2,000 per year for 8 years discounted back to the present at 10 percent is ___. (Round to the nearest cent.)
Doisneau 25-year bonds have an annual coupon interest of 8 percent, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with amarket’s required yield to maturity of 13 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds?
If the bonds are trading with a yield to maturity of 13%, then (Select the best choice below.)
A.
the bonds should be selling at par because the bond’s coupon rate is equal to the yield to maturity of similar bonds.
B.
the bonds should be selling at a premium because the bond’s coupon rate is greater than the yield to maturity of similar bonds.
C.
the bonds should be selling at a discount because the bond’s coupon rate is less than the yield to maturity of similar bonds.
D.
there is not enough information to judge the value of the bonds.
The market price is $750 for a 13-year bond ($1,000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond’s yield to maturity?
The bond’s yield to maturity is ___%. (Round to two decimal places.)
pybus, Inc. is considering issuing bonds that will mature in 25 years with an annual coupon rate of 12 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 9.5 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an Arating, the yield to maturity on similar A bonds is 10.5 percent. What will be the price of these bonds if they receive either an A or a AA rating?
a. The price of the Pybus bonds if they receive a AA rating will be $___. (Round to the nearest cent.)
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