Problem 6.01 – Bonds & YTM, Selling at Par
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition and 11th Edition
Is the YTM on a bond the same as the required return? Is the YTM the same as the coupon rate?
Is the YTM on a bond the same as the required return? Is the YTM the same as the coupon rate?
What is the effect on the value of a bond if interest rates increase after its issuance? What if rates decrease?
Given a coupon rate, the years left, par value, and TYM, you are asked to calculate the current bond price.
Determine the yield to maturity on the bonds of the Petit Chef Co.
What is the coupon rate of a bond with a specified par value, selling price, yield, and years to maturity, given that it makes periodic payments? Calculate the coupon rate on the bonds.
What is the current price of a bond issued by Westco Co. with a coupon rate and a par value, that makes periodic payments, and has a YTM that has changed since its issue a year ago? Determine the current bond price given the years, the coupon rate, the par value, and YTM. What is the price of the bond in dollars?
Solve for the yield to maturity on the bonds issued by the company given that the bond was issued a couple of years ago, the coupon rate, and the percent of par value that the bond sells for. What is the YTM?
Determine the coupon rate of the bond given the maturity of the bonds on the market, the YTM, the par value, and the current price.
Given what the treasury bills are paying and the inflation rate, calculate the approximate real rate and the exact real rate of interest.
Given the real rate and inflation rate… find the rate on the treasury.