- The bonds issued by Stainless Tubs bear an 8 percent coupon, payable semiannually. The bonds mature in 11 years and have a $1,000 face value. Currently, the bonds sell for $952. What is the yield to maturity?
- Oil Well Supply offers 7.5 percent coupon bonds with semiannual payments and a yield to maturity of 7.68 percent. The bonds mature in 6 years. What is the market price per bond if the face value is $1,000?
- Redesigned Computers has 6.5 percent coupon bonds outstanding with a current market price of $832. The yield to maturity is 16.28 percent and the face value is $1,000. Interest is paid semiannually. How many years is it until these bonds mature?
- The Corner Grocer has a 7-year, 6 percent annual coupon bond outstanding with a $1,000 par value. The bond has a yield to maturity of 5.5 percent. What will happen to the bond price if the market yield suddenly increases to 7 percent?
- Sylvan Trees has a 7 percent coupon bond on the market with ten years left to maturity. The bond makes annual payments and currently sells for $842.10. What is the yield-to-maturity?
- Kaiser Industries has bonds on the market making annual payments, with 14 years to maturity, and selling for $1,382.01. At this price, the bonds yield 7.5 percent. What is the coupon rate?
- An investment offers a 10.5 percent total return over the coming year. Sam Bernanke thinks the total real return on this investment will be only 6.2 percent. What does Sam believe the inflation rate will be for the next year?
- Bonner Metals wants to issue new 18-year bonds for some much-needed expansion projects. The company has bonds with an 11 percent coupon rate on the market that sell for $1,459.51. The bonds make semiannual payments, and mature in 18 years. What should the coupon rate be on the new bonds if the firm wants to sell them at par?
9.Go to http://finra-markets.morningstar.com/BondCenter/Default.jsp. Under the search tab, search for bonds that have been issued by Disney. Click on the bond issue that has the ticker symbol: DIS.GC
a. What is the maturity date for this issue of bonds? What is the stated coupon rate? How frequently are coupon payments made? What year were the bonds first issued?
b. How would you describe the riskiness of this bond from the investor’s perspective? Does the bond have any characteristics that makes it more or less risky for the investor? Describe the features of the bond.
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