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Category > Business & Finance Posted 18 Aug 2017 My Price 8.00

Chapter 4: 8, 17, and 18 8. Coupon Rates. Volbeat Corporation has bonds on the market with 10.5 years to maturity

Attached are the questions I need help with. Thank you!

Chapter 4: 8, 17, and 18
8. Coupon Rates. Volbeat Corporation has bonds on the market with 10.5 years to maturity, a YTM of 8.4
percent, and a current price of $945. The bonds make semiannual payments. What must the coupon rate
be on the bonds?
17. Interest Rate Risk. Bond J has a coupon rate of 4 percent. Bond S has a coupon rate of 14 percent.
Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 8 percent. If
interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? What if
rates suddenly fall by 2 percent instead? What does this problem tell you about the interest rate risk of
lower-coupon bonds?
18. Bond Yields. PK Software has 7.5 percent coupon bonds on the market with 22 years to maturity.
The bonds make semiannual payments and currently sell for 97 percent of par. What is the current yield
on PK’s bonds? The YTM? The effective annual yield?
Chapter 5: 1, 4, and 12
1. Calculating Payback. What is the payback period for the following set of cash flows? Year Cash Flow

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Status NEW Posted 18 Aug 2017 03:08 PM My Price 8.00

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