Ase the bonds for $1,175, what's their yield to adulthood? nine–13.

(Valuing bonds) (Related to

Checkpoint nine.2 on web page 298 and Checkpoint nine.three on web page 302) A 14-year, $1,000 par
price Fingen bond will pay nine percentage hobby yearly. The marketplace rate of the bond is $1,one
hundred, and the marketplace’s required yield to adulthood on a comparable-danger bond is 10
percentage. a. Compute the bond’s yield to adulthood. b. Determine the price of the bond to you, given
your desired fee of return. c. Should you buy the bond? nine–14. (Calculating yield to adulthood)
(Related to Checkpoint nine.2 on web page 298) Abner Corporation’s bonds mature in 15 years and pay
nine percentage hobby yearly. If you buy the bonds for $1,250, what's your yield to adulthood?
M09_TITM2189_13_GE_C09.indd 328 18/05/17 12:forty one PM CHAPTER nine CHAPTER nine | Debt
Valuation and Interest Rates Debt Valuation and Interest Rates 329 nine–15. (Valuing bonds) (Related to
Checkpoint nine.2 on web page 298 and Checkpoint nine.three on web page 302) The seven-year $1,000
par bonds of Vail Inc. pay nine percentage hobby. The marketplace’s required yield to adulthood on a
comparable-danger bond is 7 percentage. The modern marketplace rate for the bond is $1,one hundred.
a. Determine the yield to adulthood. b. What is the price of the bond to you, given the yield to
adulthood on a comparablerisk bond? c. Should you buy the bond on the modern marketplace rate?
nine–16. (Calculating yield to adulthood) (Related to Checkpoint nine.2 on web page 298) The Saleemi
Corporation’s $1,000 bonds pay five percentage hobby yearly and feature 12 years until adulthood. You
should purchase a bond for $915. a. What is the yield to adulthood in this bond? b. Should you buy the
bond if the yield to adulthood on a comparable-danger bond is nine percentage? Bond Valuation: Four
Key Relationships nine–17. (Applying bond valuation relationships) (Related to Checkpoint nine.2 on
web page 298) The 15-year, $1,000 par price bonds of Waco Industries pay eight percentage hobby
yearly. The marketplace rate of the bond is $1,085, and the marketplace’s required yield to adulthood
on a comparable-danger bond is 10 percentage. a. Compute the bond’s yield to adulthood. b. Determine
the price of the bond to you, given the marketplace’s required yield to adulthood on a comparable-
danger bond. c. Should you buy the bond? nine–18. (Applying bond valuation relationships) (Related to
Checkpoint nine.three on web page 302) You personal a bond that will pay $one hundred in annual
hobby, with a $1,000 par price. It matures in 15 years. The marketplace’s required yield to adulthood on
a comparable-danger bond is 12 percentage. a. Calculate the price of the bond. b. How does the price
alternate if the yield to adulthood on a comparable-danger bond (i) will increase to fifteen percentage or
(ii) decreases to eight percentage? c. Explain the consequences of your solutions in element b as they
relate to hobby-fee danger, top class bonds, and cut price bonds. d. Assume that the bond matures in
five years in preference to 15 years, and recalculate your solutions in element b. e. Explain the
consequences of your solutions in element d as they relate to hobby-fee danger, top class bonds, and
cut price bonds. nine–19. (Applying bond valuation relationships) Arizona Public Utilities issued a bond
that will pay $eighty in hobby, with a $1,000 par price. It matures in 20 years. The marketplace’s
required yield to adulthood on a comparable-danger bond is 7 percentage. a. Calculate the price of the
bond. b. How does the price alternate if the marketplace’s required yield to adulthood on a comparable-
danger bond (i) will increase to ten percentage or (ii) decreases to six percentage? c. Explain the
consequences of your solutions in element b as they relate to hobby-fee danger, top class bonds, and
cut price bonds. d. Assume that the bond matures in 10 years in preference to 20 years. Recompute
your solutions in element b. e. Explain the consequences of your solutions in element d as they relate to
hobby-fee danger, top class bonds, and cut price bonds