1) Backwater Corp. has 8% coupon bonds making annual payments with YTM of 7.6%. The present yield on these bonds is 7.95%.
How many years do these bonds have left until they mature?
2) Martin Software has 9.0% coupon bonds on market with twenty years to maturity. Bonds make semi-annual payments and presently sell for 107.3% of par.
Compute the present yield on the bonds?
What is the YTM?
What is the effective annual yield?
3) Page Enterprises has bonds on market making annual payments, with 9 years to maturity, and selling for= $966. At this price, bonds yield= 6.80%.
What should the coupon rate be on bonds?
4) Although most corporate bonds in United States make coupon payments semi-annually, bonds issued elsewhere frequently have annual coupon payments. Assume a German company issues the bond with the par value of €1,000, 25 years to maturity, and coupon rate of= 7.5% paid annually.
If yield to maturity is 8.6%, what is the present price of bond?
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