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 120 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
Thanks for the timely response, appreciate it

skipfourms123

  • Member
  • Posts: 343
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

Did you know?

HIV testing reach is still limited. An estimated 40% of people with HIV (more than 14 million) remain undiagnosed and do not know their infection status.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

Between 1999 and 2012, American adults with high total cholesterol decreased from 18.3% to 12.9%

Did you know?

Elderly adults are living longer, and causes of death are shifting. At the same time, autopsy rates are at or near their lowest in history.

Face of a southern yellowjacket (Vespula squamosa) Face of a southern yellowjacket (Vespula squamosa)
When to measure vital signs When to measure vital signs
The declining age of menarche over the past 150 years has been measured in many European countries, The declining age of menarche over the past 150 years has been measured in many European countries,
The Long Valley Caldera Erupted the Bishop Ash 760,000 Years Ago The Long Valley Caldera Erupted the Bishop Ash 760,000 Years Ago
Age-standardized disability-adjusted life year (DALY) rates from hepatitis B by country (per 100 000 ... Age-standardized disability-adjusted life year (DALY) rates from hepatitis B by country (per 100 000 ...
Overfished per year Overfished per year
Video: Fractures Animation

For a complete list of videos, visit our video library