Finance Homework Need help with finance homework. There’re 10 questions in the attached file. Please show work & provide clear explanation as to how to get
Finance Homework Need help with finance homework. There’re 10 questions in the attached file. Please show work & provide clear explanation as to how to get the answers. Q1 Sunland Corp is issuing a 10-year bond with a coupon rate of 10 percent. The interest rate for
similar bonds is currently 9 percent. Assuming annual payments, what is the value of the
bond? (Round answer to 2 decimal places, e.g. 15.25.)
Q2 Sheridan, Inc., has issued a three-year bond that pays a coupon rate of 8.5 percent. Coupon
payments are made semiannually. Given the market rate of interest of 4.2 percent, what is the
market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)
Q3 Susan Wilson is interested in buying a five-year zero-coupon bond with a face value of $1,000. She
understands that the market interest rate for similar investments is 8.2 percent. Assume annual
coupon payments. What is the current value of this bond? (Round answer to 2 decimal places,
e.g. 15.25.)
Q4 Ten-year zero-coupon bonds issued by the U.S. Treasury have a face value of $1,000 and interest
is compounded semiannually. If similar bonds in the market yield 12.0 percent, what is the value of
these bonds? (Round answer to 2 decimal places, e.g. 15.25.)
Q5 Blossom Real Estate Company management is planning to fund a development project by issuing
10-year zero coupon bonds with a face value of $1,000. Assuming semiannual compounding, what will
be the price of these bonds if the appropriate discount rate is 9.6 percent? (Round answer to 2
decimal places, e.g. 15.25.)
Q6 Mary Smith is looking to invest in a three-year bond that makes semi-annual coupon payments at
a rate of 5.225 percent. If these bonds have a market price of $970.00, what yield to maturity can she
expect to earn? (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final
answer to 2 decimal places, e.g. 15.25%.)
Q7 Mark Harris bought 10-year, 12.4 percent coupon bonds issued by the U.S. Treasury three years
ago at $908.72. If he sells these bonds, for which he paid the face value of $1,000, at the current
price of $820.11, what is his realized yield on the bonds? Assume similar coupon-paying bonds make
annual coupon payments. (Round intermediate calculations to 5 decimal places, e.g. 1.25145
and final answer to 2 decimal places, e.g. 15.25%.)
Q8 Carla Vista, Inc., has outstanding bonds that will mature in six years and pay an 8 percent coupon
semiannually. If you paid $1,009.96 today and your required rate of return was 7.1 percent. (Round
intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal
places, e.g. 15.25.)
Q9 Ivanhoe Corp. management plans to issue seven-year zero coupon bonds. It has learned that
these bonds will sell today at a price of $443.46. What is the yield to maturity on these
bonds? (Round answer to 3 decimal places, e.g. 15.251%.)
Q10 Pharoah, Inc., has four-year bonds outstanding that pay a coupon rate of 7.1 percent and make
coupon payments semiannually. If these bonds are currently selling at $917.890.
What is the yield to maturity that an investor can expect to earn on these bonds? (Round answer to
1 decimal place, e.g. 15.2%.)
Yield to maturity
%
What is the effective annual yield? (Round answer to 1 decimal place, e.g. 15.2%.)
Effective annual yield
%
Purchase answer to see full
attachment
