V 1 Consider a 20?-year bond with a face value of $ 1 comma 000 that has...

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Finance

V
1 Consider a 20?-year bond with a face value of $ 1 comma 000that has a coupon rate of 5.8 %, with semiannual payments.
a. What is the coupon payment for this? bond?
b. Draw the cash flows for the bond on a timeline.
a. What is the coupon payment for this? bond?
The coupon payment for this bond is $
Nothing. ? (Round to the nearest?cent.)
b. Draw the cash flows for the bond on a timeline.
Select the timeline below that shows the correct cash flows forthis bond.???(Select the best choice?below.)
A.
The timeline starts at Period 0 and ends at Period 40. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period39. In Period 40, the cash flow is $ 1,029.00.
Period012nothing3940
Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,029.00
B.
The timeline starts at Period 0 and ends at Period 20. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period19. In Period 20, the cash flow is $ 1,029.00.
Period012nothing1920
Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,029.00
C.
The timeline starts at Period 0 and ends at Period 20. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period19. In Period 20, the cash flow is $ 1,000.
Period012nothing1920
Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,000
D.
The timeline starts at Period 0 and ends at Period 40. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period39. In Period 40, the cash flow is $ 1,000.
Period012nothing3940
Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,000
2 Assume that a bond will make payments every six months asshown on the following timeline? (using six-month? periods):
The timeline starts at Period 0 and ends at Period 50. Thetimeline shows a cash flow of $ 19.31 each from Period 1 to Period49. In Period 50, the cash flow is $ 19.31 plus $ 1,000.
Period012nothing4950
Cash Flows nothing$ 19.31$ 19.31nothing$ 19.31$ 19.31 plus $1,000
a. What is the maturity of the bond?(in years)?
b. What is the coupon rate?(as a?percentage)?
c. What is the face?value?
a. What is the maturity of the bond?(in years)?
The maturity is
Nothing years.???(Round to the nearest?integer.)
b. What is the coupon rate?(as a?percentage)?
The coupon rate is
Nothing?%. ?(Round to two decimal?places.)
c. What is the face?value?
The face value is $
Nothing. ?(Round to the nearest?dollar.)
3 Assume that a bond will make payments every six months asshown on the following timeline? (using six-month? periods):
The timeline starts at Period 0 and ends at Period 20. Thetimeline shows a cash flow of $ 20.00 each from Period 1 to Period19. In Period 20, the cash flow is $ 20.00 plus $ 1,000.
Period012nothing1920
Cash Flows nothing$ 20.00$ 20.00nothing$ 20.00$ 20.00 plus $1,000
a. What is the maturity of the bond?(in years)?
b. What is the coupon rate?(as a?percentage)?
c. What is the face?value?
a. What is the maturity of the bond?(in years)?
The maturity is
Nothing years.???(Round to the nearest?integer.)
b. What is the coupon rate?(as a?percentage)?
The coupon rate is
Nothing?%. ?(Round to two decimal?places.)
c. What is the face?value?
The face value is $
Nothing. ?(Round to the nearest dollar.)
4 Your company wants to raise $9.0 million by issuing 15?-yearzero-coupon bonds. If the yield to maturity on the bonds will be 4% (annual compounded APR), what total face value amount of bondsmust you?issue?
The total face value amount of bonds that you must issue is$
Nothing. ?(Round to the nearest?cent.)

Answer & Explanation Solved by verified expert

3.9 Ratings (691 Votes)

1 Bond Coupon 58 payable semiannually Bond Tenure 20 years or 20 x 2 40 halfyears and Bond Par Value 1000 a SemiAnnual Coupon Payment Par Value x Annual Bond Coupon Rate x 12 1000 x 0058 x 12 29 b As the See Answer

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V1 Consider a 20?-year bond with a face value of $ 1 comma 000that has a coupon rate of 5.8 %, with semiannual payments.a. What is the coupon payment for this? bond?b. Draw the cash flows for the bond on a timeline.a. What is the coupon payment for this? bond?The coupon payment for this bond is $Nothing. ? (Round to the nearest?cent.)b. Draw the cash flows for the bond on a timeline.Select the timeline below that shows the correct cash flows forthis bond.???(Select the best choice?below.)A.The timeline starts at Period 0 and ends at Period 40. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period39. In Period 40, the cash flow is $ 1,029.00.Period012nothing3940Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,029.00B.The timeline starts at Period 0 and ends at Period 20. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period19. In Period 20, the cash flow is $ 1,029.00.Period012nothing1920Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,029.00C.The timeline starts at Period 0 and ends at Period 20. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period19. In Period 20, the cash flow is $ 1,000.Period012nothing1920Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,000D.The timeline starts at Period 0 and ends at Period 40. Thetimeline shows a cash flow of $ 29.00 each from Period 1 to Period39. In Period 40, the cash flow is $ 1,000.Period012nothing3940Cash Flows nothing$ 29.00$ 29.00nothing$ 29.00$ 1,0002 Assume that a bond will make payments every six months asshown on the following timeline? (using six-month? periods):The timeline starts at Period 0 and ends at Period 50. Thetimeline shows a cash flow of $ 19.31 each from Period 1 to Period49. In Period 50, the cash flow is $ 19.31 plus $ 1,000.Period012nothing4950Cash Flows nothing$ 19.31$ 19.31nothing$ 19.31$ 19.31 plus $1,000a. What is the maturity of the bond?(in years)?b. What is the coupon rate?(as a?percentage)?c. What is the face?value?a. What is the maturity of the bond?(in years)?The maturity isNothing years.???(Round to the nearest?integer.)b. What is the coupon rate?(as a?percentage)?The coupon rate isNothing?%. ?(Round to two decimal?places.)c. What is the face?value?The face value is $Nothing. ?(Round to the nearest?dollar.)3 Assume that a bond will make payments every six months asshown on the following timeline? (using six-month? periods):The timeline starts at Period 0 and ends at Period 20. Thetimeline shows a cash flow of $ 20.00 each from Period 1 to Period19. In Period 20, the cash flow is $ 20.00 plus $ 1,000.Period012nothing1920Cash Flows nothing$ 20.00$ 20.00nothing$ 20.00$ 20.00 plus $1,000a. What is the maturity of the bond?(in years)?b. What is the coupon rate?(as a?percentage)?c. What is the face?value?a. What is the maturity of the bond?(in years)?The maturity isNothing years.???(Round to the nearest?integer.)b. What is the coupon rate?(as a?percentage)?The coupon rate isNothing?%. ?(Round to two decimal?places.)c. What is the face?value?The face value is $Nothing. ?(Round to the nearest dollar.)4 Your company wants to raise $9.0 million by issuing 15?-yearzero-coupon bonds. If the yield to maturity on the bonds will be 4% (annual compounded APR), what total face value amount of bondsmust you?issue?The total face value amount of bonds that you must issue is$Nothing. ?(Round to the nearest?cent.)