You find the following corporate bond quotes. To calculate the number of years u

Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000. Company (Ticker) Coupon Maturity Last Price Last Yield EST $ Vol (000’s) Xenon, Inc. (XIC) 7.000 Jan 15, 2036 94.343 ?? 57,378 Kenny Corp. (KCC) 7.280 Jan 15, 2035 ?? 5.46 48,957 Williams Co. (WICO) ?? Jan 15, 2042 94.895 7.16 43,818 What price would you expect to pay for the Kenny Corp. bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price $ 2,107.83 incorrect What is the bond’s current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Coupon Rate = 7.280%

Semi Annual Coupon Rate = 7.280%/2 = 3.640%

Semi Annual Coupon Payment = 36.40

Number of years to maturity = 19 years

Number of half years to maturity = 19 * 2 = 38

Yield = 5.46%

Semi Annual Rate = 5.46%/ 2 = 2.73%

FV = 1,000

Using Financial Calculator:

PV = 1,213.55

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.