zacharie101
Oct 29, 2012, 08:23 PM
I probably did these wrong but these are done using excel please tell me if I did them right
1. The A Company has 8% coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 6%, what is the current bond price?
=PRICE("01-jan-12","01-jan-22",0.08,0.06,100,1) = 114.7201741
2. The B Company has 9% coupon bonds on the market with nine years left to maturity. The bonds make annual interest payments and sells for $884.50. What is the YTM?
=YIELD("1-jan-00","1-jan-09",0.09,884.5/100,100,1) = 1.035353469
3. The C Company needs to raise capital for a plant expansion and has decided to issue 20 year zero coupon bonds to raise the money. If the required rate is 8%, what will the bonds sell for at issuance?
=PV(8%,20,0,-1000) = 214.55
4. The D Company issued 11-year bonds one year ago at a coupon rate of 8.2%. The bonds make annual payments of interest. If the YTM is 7.4%, what is the current bond price?
=PRICE("01-jan-00","01-jan-11",8.2%,7.4%,100,1) = 105.8812166
5. You are considering the purchase of the bonds of ABC on July 15, 2000. They pay semi-annual interest, will mature on December 31, 2008, have a coupon rate of 7.5% and are selling for $900. What is the YTM of these bonds?
=YIELD("15-jul-00","31-dec-08",7.5%,900/100,100,2) = .850279649
6. You want to buy some bonds of the XYZ Corp. on February 15, 2010. They mature on April 15, 2014. The coupon rate is 5% and the yield to maturity is 4.375%. What would you be willing to pay for ten of those bonds?
=PRICE("15-Feb-10","15-Apr-14",5%,4.375%,100,1) = 102.3194361
1. The A Company has 8% coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 6%, what is the current bond price?
=PRICE("01-jan-12","01-jan-22",0.08,0.06,100,1) = 114.7201741
2. The B Company has 9% coupon bonds on the market with nine years left to maturity. The bonds make annual interest payments and sells for $884.50. What is the YTM?
=YIELD("1-jan-00","1-jan-09",0.09,884.5/100,100,1) = 1.035353469
3. The C Company needs to raise capital for a plant expansion and has decided to issue 20 year zero coupon bonds to raise the money. If the required rate is 8%, what will the bonds sell for at issuance?
=PV(8%,20,0,-1000) = 214.55
4. The D Company issued 11-year bonds one year ago at a coupon rate of 8.2%. The bonds make annual payments of interest. If the YTM is 7.4%, what is the current bond price?
=PRICE("01-jan-00","01-jan-11",8.2%,7.4%,100,1) = 105.8812166
5. You are considering the purchase of the bonds of ABC on July 15, 2000. They pay semi-annual interest, will mature on December 31, 2008, have a coupon rate of 7.5% and are selling for $900. What is the YTM of these bonds?
=YIELD("15-jul-00","31-dec-08",7.5%,900/100,100,2) = .850279649
6. You want to buy some bonds of the XYZ Corp. on February 15, 2010. They mature on April 15, 2014. The coupon rate is 5% and the yield to maturity is 4.375%. What would you be willing to pay for ten of those bonds?
=PRICE("15-Feb-10","15-Apr-14",5%,4.375%,100,1) = 102.3194361