Help With Bond Question

Help on this Bond question?

ABC hospital has a bond issue outstanding with a coupon rate of 5percent and 7 years remaining until maturity. The par value of the bond is $1,000 and the bond pays interest annually.

What is the current value of the bond if present market conditions justify a 10 percent required rate of return?

Now suppose that the bond had semiannual payments. What would be its current value in this case?

Need help on bond question?

1)The bonds of microhard inc carry a 10% annual coupon, have a $1000 face value, and mature in 4 years. Bonds of equivalent risk yield 15%. Microhard is having cash flow problems and has asked its bondholders to accept the following deal: The firm would like to make the next three coupon payments at half the scheduled amount, and make the final coupon payment be $251. If this plan is implemented, what will be the market price of the bond?

Bond question help? (:?

That depends... There are 2 ways to think about bond strength, which I didn't clarify until grad school but it helped explain so much when I did. In this case, I'd assume they are asking about breaking apart the covalent bonds to result in 2 neutral atoms (homolytic bond cleavage). The better the orbital overlap, the more stable the sigma bond will be, and the harder it will be to break. For your example, C-C will have the best orbital overlap because the 2 atoms are identical so their orbitals are the same size, so C-C would be the "strongest". C-Br would be weakest because Br is bigger and has poorer orbital overlap with the C orbital.

On the other hand, you could be talking about ionizing the bond (heterolytic bond cleavage) - this is used a lot to compare acids like H-Cl vs H-Br. Then the result is H+ and X-, rather than 2 neutral atoms. Whichever bond is more polarized will be easy to completely ionize, because it's already part of the way there. In your example, this reasoning gives you the same answer for strongest (C-C) but would predict that C-Cl would be weakest because it's more polar. However, neither C-Cl nor C-Br are really polar enough to ever ionize, so I'd go with the above explanation in this case.

Help!!!!!!!! Bond Yield Question?

if you bought the bond at par and hold the bond til maturity, your yield will be the coupon rate, or 3% no matter what interest rates do in the meantime. However , if you try to sell your bond in a few years when the giong int rate has gone to 4%, then you will have to give the buyer an investment that will yield him 4%. No investor would buy your bond yielding 3% when he could buy another (new) one that yields 4%. That is why the price of your bond will have to drop to entice them to buy yours because it will now yield 4% at the lower price. Interest rates are driven by investor demand. If no one wants your bond (ie junk rated) then you will have to offer them a high enough yield to get them to buy to make up for the risk.

James Bond questions, please help!?

1. Who was the second actor to play James Bond in an ‘official’ (EON) production film? - George Lazenby

2. How many Bond films have there been, excluding those made for TV and biographies, that were not made by EON production? - IDK

3. In which film did Bond use explosive toothpaste? - Licence to Kill

4. What was the explosive toothpaste called? - Dentonite

5. Who played the part of Oddjob in Goldfinger? - Some korean Wrestler whose name escapes me

6. What was Oddjob’s most potent weapon? - Bowler Hat

7. In how many films did the villain Blofeld appear? - 4 maybe 5?

8. Which Roger Moore Bond film featured the final appearance of Lois Maxwell as Moneypenny? IDK

9. Who has sung the title track for the most Bond films? Shirley Bassey, i think

Bond question please help?

You are given the following information:
(A) face value of bond is $11,000
(B) Bond matures in 22 years
(C) No interest payments for the first 4 years
(D) Pays $600 semi-annually over 14 years
(E) Pays $800 semi-annually over the last 4 years
(F) The required rate of return is 9% with interest compounded semi-annually.
(G) Based on (F), there are 44 cash flows (22 years times 2 periods per year)

Here are your cash flow:
(A) $0 cash flows for the first 8 periods
(B) $600 in cash flows for the next 28 periods
(C) $800 in cash flows for the next 7 periods
(D) $11,800 (face value plus last $800) in cash flow for the last period
(E) The discount rate is 4.5% per period (9% divided 2 periods in a year)

You solve it two ways, with a financial calculator (I used a HB 17B2) and got $9,309.87 (rounded). I've attached a quick spreadsheet as follows:

Period CF PV
1 0 0.00
2 0 0.00
3 0 0.00
4 0 0.00
5 0 0.00
6 0 0.00
7 0 0.00
8 0 0.00
9 600 403.74
10 600 386.36
11 600 369.72
12 600 353.80
13 600 338.56
14 600 323.98
15 600 310.03
16 600 296.68
17 600 283.91
18 600 271.68
19 600 259.98
20 600 248.79
21 600 238.07
22 600 227.82
23 600 218.01
24 600 208.62
25 600 199.64
26 600 191.04
27 600 182.81
28 600 174.94
29 600 167.41
30 600 160.20
31 600 153.30
32 600 146.70
33 600 140.38
34 600 134.34
35 600 128.55
36 600 123.02
37 800 156.96
38 800 150.20
39 800 143.73
40 800 137.54
41 800 131.62
42 800 125.95
43 800 120.53
44 11,800 1,701.24

Sum of PV's: 9,309.87

Help with Bonds~ finance question?

Bond X is a premium bond making semiannual payments. The bond pays a 9 percent coupon, has a YTM of 7 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a 7 percent coupon, has a YTM of 9 percent, and also has 13 years to maturity.

If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In three years? In eight years? In 12 years? In 13 years?

Help with Conversion of Bonds Question?

On January 1, 2010, when its $41 par value common stock was selling for $108 per share, Bartz Corp. issued $13,500,000 of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,350 bond to convert the bond into five shares of the corporation's common stock. The debentures were issued for $14,310,000. The present value of the bond payments at the time of issuance was $11,475,000, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2011, the corporation's $41 par value common stock was split 2 for 1, and the conversion rate for the bonds was adjusted accordingly. On January 1, 2012, when the corporation's $20 par value common stock was selling for $182 per share, holders of 20% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums.

(a) Prepare in general journal form the entry to record the original issuance of the convertible debentures.

(b) Complete the two schedules and prepare in general journal form the entry to record the exercise of the conversion option, using the book value method.

Recording the conversion:

Please help with Bond Value Question! (Just want to know how to solve it, already know the answer!)?

C = coupon payment (par value * coupon rate) = ($10,000 * 8% = $8,000)
n = number of years (10)
i = market rate, required yield (10% = 0.10)
k = number of coupon payments per year (1?)
P = value at maturity (or par value) = 100,000

A = (1 + (i/k))^(nk)
Bond Price = C/k * (1 - 1/A)/(i/k) + P/A

A = 1.1^10
A ≈ 2.5937

Bond Price = 8000 * (1 - 1/2.5937)/0.1 + 100000/2.5937
= 8000 * 6.1445 + 38551
= 49152 + 38555
= 87707

Help With Bond Prices?

Can someone help me with these questions, I can't figure them out!

1) A treasury bond due in one year has a yield of 6.3% while a treasury bond due in 5 years has a yield of 8.8%. A bond due in 5 years issued by High Country Marketing Corporation has a yield of 9.6% while a bond due in one year issued by High Country Marketing Corporation has a yield of 6.8%. The default risk premiums on the one-year and 5-year bonds issued by High Country Marketing Corp. are respectively __________ and _________.

a. 0.4%, 0.3%
b. 0.4%, 0.5%
c. 0.5%, 0.5%
d. 0.5%, 0.8%

2)A discount bond that pays interest semiannually will ______.
I. have a lower price than an equivalent annual payment bond
II. have a higher EAR than an equivalent annual payment bond
III. sell for less than its conversion value

a. I and II only
b. I and III only
c. II and III only
d. I, II and III

3) An investor pays $989.40 for a bond. The bond has an annual coupon rate of 4.8%. What is the current yield on this bond?

a. 4.80%
b. 4.85%
c. 9.60%
d. 9.70%

4) You buy a bond with a $1,000 par today for a price of $875. The bond has 6 years to maturity and makes annual coupon payments of $75 per year. You hold the bond to maturity but you do not reinvest any of your coupons. What was your effective EAR over the holding period?

a. 10.40%
b. 9.57%
c. 7.45%
d. 8.78%

5)You hold a subordinated debenture in a firm. In the event of bankruptcy you will be paid off before which one of the following?

a. Mortgage bonds
b. Senior debentures
c. Preferred stock
d. Equipment obligation bonds