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Author Question: Cosmic Communications Inc. is planning two new issues of 20-year bonds. Bond Par will be sold at its ... (Read 60 times)

sc1250

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Question 1

Consider some bonds with one annual coupon payment of 8.65%. The bonds have a par value of $1,000, a current price of $1,160, and they will mature in 17 years. What is the yield to maturity on these bonds?

6.02%


6.50%


6.84%


7.01%



Question 2

Cosmic Communications Inc. is planning two new issues of 20-year bonds. Bond Par will be sold at its $1,000 par value, and it will have a 12% semiannual coupon. Bond OID will be an original issue discount bond, and it will also have a 20-year maturity and a $1,000 par value, but its semiannual coupon will be only 7%. If both bonds are to provide investors with the same effective yield, how many of the OID bonds must Cosmic issue to raise $4,000,000? Disregard flotation costs, and round your final answer up to a whole number of bonds.

6,105


6,412


6,680


6,931



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Marked as best answer by sc1250 on Aug 7, 2023

annaelena92

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sc1250

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Reply 2 on: Aug 7, 2023
Excellent


komodo7

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Reply 3 on: Yesterday
Gracias!

 

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