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Author Question: Progressive Plastics Inc. issued 30-year 7 annual coupon bonds five years ago. Currently, the yield ... (Read 108 times)

nramada

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on: Jul 10, 2018
Progressive Plastics Inc. issued 30-year 7 annual coupon bonds five years ago. Currently, the yield to maturity is 9.65 on these 1,000 par value bonds. What is the current price per bond?
 
  What will be an ideal response?

Question 2

Endicott Enterprises Inc. has issued 30-year semiannual coupon bonds with a face value of 1,000. If the annual coupon rate is 14 and the current yield to maturity is 15, what is the firm's current price per bond?
 
  A) 934.20
  B) 1,000.00
  C) 934.34
  D) 466.79


mariahkathleeen

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer:
Bond Price = PMT  +
= 70  + = 752.84.

MODE = END
INPUT 25 9.65 ? -70 -1,000
KEY N I/Y PV PMT FV
CPT 752.84

Answer to Question 2

Answer: A
Explanation: A)
Bond Price = PMT  +
= 70  + = 934.20
MODE = END, P/Y = 2, C/Y = 2
INPUT 60 15 ? -70 -1,000
KEY N I/Y PV PMT FV
CPT 934.20


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