Managerial Finance

Chapter 5: 5-1 Jackson Corporations bonds ca-ca 12 old age remaining to due date. Interest is compensable annually, the bonds gull a $1,000 score honor, and the coupon interest reckon is 8%. The bonds have a return to maturity of 9%. What is the new market place price of these bonds? P = F*r*[1 -(1+i)^-n]/i + C*(1+i)^-n 1000*.08 * (1 - 1.09^-12)/.09 + 1000*1.09^-12 = $928.39 5-2 Wilson Wonderss bonds have 12 eld remaining to maturity. Interest is paying annually, the bonds have a $1,000 par quantify, and the coupon interest say is 10%. The bonds sell at a price of $850. What is their yield to maturity? Inputs| | flowing price: | $ | | Par Value: | $ | | voucher Rate: | | % | Years to due date: | | | | Results| | Current render: | | % | take back to adulthood: | | % | Yield to Maturity = 12.48% 5-6 The real safe rate is 3%, and inflation is pass judgment to be 3% for the next 2 years. A 2-year exchequer guarantor yields 6.3% . What is the maturity risk premium for the 2-year security? k = k* + IP + DRP + LP + MRP. K T-2 = 6.3% = 3% + 3% + MRP; DRP = LP = 0. MRP = 6.3% - 6% = 0.3% 5-7 Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds fledged in 8 years, have a grammatical construction value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds?

Bond Inputs| shape of years to maturity| | Coupon rate | | Face value | | Yield to maturity | | BOND VALUE | | | Price of bonds= $1,085.80 5-13 You dear purchased a bond that matures in 5 years. The bond has a face value of $1,000 and has an 8% annual coupon. The bond has a c urrent yield of 8.21%. What is the bonds yie! ld to maturity? Current Yield = Annual Coupon Present Value 0.0821 = 80 PV PV = 80 0.0821 = 974.42 N = 5; PMT = 80; FV=1000; PV = 974.42 CPT I/Y I/Y = 8.65% Chapter 6: 6-6 If a societys important were to double, would its expected return double? If a companys beta were to...If you want to get a full essay, recount it on our website: OrderEssay.net

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