Module 02 Content
XYZ Inc. has issued a 30-year bond with a 6% coupon rate. If the market is yielding 7%, what is the current selling price of the bond?
XYZ Inc. has issued a 30-year bond that pays semiannually with a 6% coupon rate. If the market is yielding 8%, what is the current selling price of the bond?
XYZ Inc. has issued a 15-year bond that pays quarterly with a 4% coupon rate. If the bond is selling for $950, what is the future value of the bond?
XYZ Inc. has issued a 30-year bond with a coupon rate of 8%, the future value of $1000, and a market rate of 9%. What is the current market price for the bond?
XYZ Inc. has issued a 30-year bond with a selling price of $950 and a coupon payment of $100. What is the return on the bond?
Problem 1.
Company XYZ
value
Time
Coupon rate
market yield
CV
1000
30
6%
7%
$613.18
Company XYZ
Value
Time
Coupon rate
market yield
CV
1000
30
6%
8%
$660.53
$613.18
Problem 2.
Problem 3.
Company XYZ
CV
950
Time
15
Coupon rate
4%
pay period quarterly
FV
($2,536.24)
Problem 4.
Company XYZ
time
coupon rate
FV
market rate
CV
30
8%
1000
9%
($897.26)
Problem 5.
Company XYZ
time
CV
coupon payment
return
30
950
100
9.50%
9.5
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