Calculate yield to maturity bonds

    • [DOC File]Solutions to Chapter 1

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      McGriff Motors has bonds outstanding that will mature in 12 years. The bonds pay a 12 percent semiannual coupon and have a face value of $1,000 (that is, the bonds pay a $60 coupon every six months). The bonds currently have a yield to maturity of 10 percent. The bonds are callable in 8 years and have a call price of $1,050.

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    • [DOC File]Bond Yields and Prices

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      Yields to maturity are about 4.3% for the 2% coupon, 4.2% for the 4% coupon, and 3.9% for the 8% coupon. The 8% bond had the shortest duration (7.65 years), the 2% bond the longest (9.07 years).

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    • [DOC File]CS FIRSTBOSTON - NYU

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      As explained earlier is the same unit, some bonds carry a feature that entitles the issuer to call (buy back) the bond prior to the stated maturity date in accordance with a call schedule (which specifies a call price for early call date). For such bonds, it is a practice to calculate the yield to bill (YTC) as well as the YTM. P = P = Price

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    • [DOCX File]Homework Assignment – Week 2

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      The analyst should be using yield to maturity instead of current yield to calculate cost of debt. [This answer assumes the value of the debt provided is the market value. If it is the book value, then 12.5% would be the average coupon rate of outstanding debt, which would also be a poor estimate of the required rate of return on the firm’s debt.]

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    • Problem Set on Chapter 10

      This is recognizable as an extension of the simple yield to maturity calculation which one would normally solve for the discount rate, r, from the known price and cashflow schedule. This discount rate or yield would usually reflect opinions of the riskiness of the cashflow schedule.

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    • How to Calculate Yield to Maturity: 9 Steps (with Pictures)

      Yield to maturity. Most commonly used. Promised compound rate of return received from a bond purchased at the current market price and held to maturity. Assumes: Interest payments reinvested. Reinvested at computed YTM Equates the present value of the expected future cash flows to the initial investment. Similar to internal rate of return ...

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    • [DOC File]UNIT 6: VALUATION OF BONDS, PREFERENCE AND …

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      a. The coupon rate must be 8% because the bonds were issued at par value. with a yield to maturity of 8%. Now, the price is. 40 × Annuity factor(7%, 16 periods) + 1000/1.0716 = $716.60. b. The investors pay $716.60 for the bond. They expect to receive the promised coupons plus $800 at maturity. We calculate the yield to maturity based on these ...

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    • [DOC File]Solutions to Questions and Problems

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      Calculate the present value of a $1,000 zero-coupon bond with five years to maturity if the yield to maturity is 6%. A lottery claims their grand price is $10 million, payable over 20 years at $500,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of …

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    • [DOCX File]Chapter 03 - Valuing Bonds

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      The yield to maturity on the company’s long-term bonds is 8 percent, and the firm estimates that its overall composite WACC is 10 percent. The risk-free rate of interest is 5.5 percent, the market risk premium is 5 percent, and the company’s tax rate is 40 percent.

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