This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Ten years ago Bacon Signs Inc. issued twenty-five-year 8 annual coupon bonds with a 1,000 face value ... (Read 68 times)

Kthamas

  • Hero Member
  • *****
  • Posts: 546
on: Jul 10, 2018
Ten years ago Bacon Signs Inc. issued twenty-five-year 8 annual coupon bonds with a 1,000 face value each. Since then, interest rates in general have risen and the yield to maturity on the Bacon bonds is now 9.
 
  Given this information, what is the price today for a Bacon Signs bond?
  A) 1,000
  B) 919.39
  C) 901.77
  D) 1.085.59

Question 2

The appropriate rate to use to discount the cash flows of a bond in order to determine the current price is the ________.
 
  A) yield to maturity
  B) coupon rate
  C) par rate
  D) current yield


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

aloop

  • Sr. Member
  • ****
  • Posts: 315
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: B
Explanation: B)
Bond Price = PMT  +
= 80  + = 919.39.

MODE = END
INPUT 15 12 0 -80 -1,000,000
KEY N I/Y PV PMT FV
CPT 919.39

Answer to Question 2

Answer: A


Kthamas

  • Member
  • Posts: 546
Reply 2 on: Jul 10, 2018
Gracias!

deja

  • Member
  • Posts: 332
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

If all the neurons in the human body were lined up, they would stretch more than 600 miles.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

Did you know?

Alcohol acts as a diuretic. Eight ounces of water is needed to metabolize just 1 ounce of alcohol.

Did you know?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Signs and symptoms of a patient with heart failure. Signs and symptoms of a patient with heart failure.
Common skin signs. Each of the illustrations depicts a section through skin Common skin signs. Each of the illustrations depicts a section through skin
U.S. Life Expectancy by Year of Birth U.S. Life Expectancy by Year of Birth
The average weight gain between Thanksgiving and New Year's Day is about a pound The average weight gain between Thanksgiving and New Year's Day is about a pound
A man put aside $5710.00 at the end of every 3 months for seven years. How much will he have ... A man put aside $5710.00 at the end of every 3 months for seven years. How much will he have ...
Population age 65 and over and age 85 and over, selected years 1900-2008 and projected 2010-2050. Population age 65 and over and age 85 and over, selected years 1900-2008 and projected 2010-2050.
Video: How do the different types of chromatography work? (No Audio)

For a complete list of videos, visit our video library