Bonds Valuation

1. A 5-year bond with a coupon rate of 4% has a face value of $1000. What is the annual interest
payment?

2. A 3-year bond with 10% coupon rate and $1000 face value yield to maturity is 8% . Assuming
annual coupon payment, calculate the price of the bond.

3. A 10-year bond with 12.5% coupon rate and $1000 face value yield to maturity is 14.5% .
Assuming annual coupon payment, calculate the price of the bond.

4. A 10-year bond with 12.5% coupon rate and $1000 face value yield to maturity is 14.5% .
Assuming semi annual coupon payment, calculate the price of the bond.

5. A four-year bond has an 8% coupon rate and a face value of $1000. If the current price of the
bond is $878.31, calculate current yield assuming annual interest payments.

6. A five -year bond has an 8% coupon rate and a face value of $1000. If the current price of the
bond is $1075, calculate current yield assuming annual interest payment.

7. A twenty year bond is currently selling at $850 and current yield is 8%. What coupon rate
offered by company?

8. A twenty year bond is currently selling at $1250 and current yield is 8%. What coupon rate
offered by company?

9. A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the
bond is10%, calculate the price of the bond assuming that the bond makes semi-annual coupon
interest payments.

10. A four-year bond has an 8% coupon rate and a face value of $1000. If the current price of the
bond is $878.31, calculate the yield to maturity of the bond (assuming annual interest
payments).

11. A ten -year bond has an 10% coupon rate and a face value of $1000. If the current price of the
bond is $1150, calculate the yield to maturity of the bond (assuming annual interest payments).
12. Suppose you want to offer zero coupon bond with a face value of $1,000 maturing in twenty
years. If the yield to maturity (YTM) on the bond is 8.00%, what will the price of the bond
offered by your company?

13. Suppose you offer zero coupon bond at $245 with a face value of $1,000 maturing in twenty
years. If the yield to maturity (YTM) on the bond is 8.00%, what will the price of the bond after
two years?

14. A bond for J. Morris, Inc. a coupon rate of 6%. The yield to maturity is 7%. The bond has a
remaining life of 20 years and makes semi-annual coupon payments? What is the present value
of the bond’s face value?

15. A bond for Firebird, Inc. has a coupon rate of 7%. The yield to maturity is 6.8%. The bond has a
remaining life of 30 years and makes annual coupon payments? What is this bond’s current
market value?

16. A bond for J. Morris, Inc. a coupon rate of 6%. The yield to maturity is 7%. The bond has a
remaining life of 20 years and makes semi-annual coupon payments? What is this bond’s
current market value?

17. A bond for Ballhawkers, Inc. has a coupon rate of 7%. The yield to maturity is 6.8%. The bond
has a remaining life of 30 years and makes semi-annual coupon payments? What is this bond’s
current market value?