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    jlana's Avatar
    jlana Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Dec 13, 2008, 09:04 PM
    The following bond quotations are taken from the Wall Street Journal dated
    The following bond quotations are taken from the Wall Street Journal dated
    Friday, September 5, 2003:
    Company Coupon Maturity Last Price Yield
    International Paper (IP) 6.750 Sep 01, 2011 108.198 5.468
    Sara Lee (SLE) 3.875 Jun 15, 2013 89.700 5.235
    Wells Fargo (WFC) 7.250 Aug 24, 2005 109.645 2.191
    General Motors (GM) 7.125 Jul 15, 2013 101.201 6.952
    Lincoln National (LNC) 6.200 Dec 15, 2011 105.903 5.307
    a. Explain why the International Paper bond is selling at a premium but the
    Sara Lee is selling at a discount.
    b. Why is the yield (yield to maturity) on the General Motors bond so much
    Higher than the yield on the Sara Lee bond?
    c. Why is the yield (yield to maturity) on the Wells Fargo Bank bond so much
    Less than the yield on the Lincoln National Corp. bond?
    Clough's Avatar
    Clough Posts: 26,677, Reputation: 1649
    Uber Member
    		  
    #2

    Dec 14, 2008, 12:45 AM
    Quote Originally Posted by jlana View Post
    The following bond quotations are taken from the Wall Street Journal dated
    Friday, September 5, 2003:
    Company Coupon Maturity Last Price Yield
    International Paper (IP) 6.750 Sep 01, 2011 108.198 5.468
    Sara Lee (SLE) 3.875 Jun 15, 2013 89.700 5.235
    Wells Fargo (WFC) 7.250 Aug 24, 2005 109.645 2.191
    General Motors (GM) 7.125 Jul 15, 2013 101.201 6.952
    Lincoln National (LNC) 6.200 Dec 15, 2011 105.903 5.307
    a. Explain why the International Paper bond is selling at a premium but the
    Sara Lee is selling at a discount.
    b. Why is the yield (yield to maturity) on the General Motors bond so much
    higher than the yield on the Sara Lee bond?
    c. Why is the yield (yield to maturity) on the Wells Fargo Bank bond so much
    less than the yield on the Lincoln National Corp. bond?
    Hi, jlana!

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