Diane Jinky Gali

BSIT101

Seatwork 02

1. Determine the current yield of a bond whose face value is ₱33,200 and pays a yearly interest of

13.7% if purchased at ₱36,700.

Annual Dividend per share

Current Yield=
Current Price per share
When the price of bond is 33,200

0.0137 (33,200)
Current Yield= =13.7 %
33,200
When the price of bond is 36,700

0.0137 (33200)
Current Yield= =12.39 %
36,700

2. What is the current yield of a bond whose face value is ₱26,200 and pays a yearly interest of 8% if
purchased of ₱18,400?

Annual Dividend per share

Current Yield=
Current Price per share
When the price of bond is 26,200

0.08 (26,200)
Current Yield= =8 %
26,200
When the price of bond is 18,400

0.08 (26,200)
Current Yield= =11.39%
18,400

3. Determine the current yield of a bond whose face value is ₱17,560 and pays a yearly interest of
8.7% if purchased at ₱16,970.

Annual Dividend per share

Current Yield=
Current Price per share
When the price of bond is 17,560

0.087 (17,560)
Current Yield= =8.7 %
17,560
 When the price of bond is 16,070

0.087 (17,560)
Current Yield= =9.5 %
16,070

4. A ₱75,000, at 11% bond pays coupon semiannually redeemable at ₱90,000 on January 13, 2017 is
bought on January 13, 2011 to earn interest 13% compounded semiannually. Find the purchase
price.

Given: V = 75,000 r = 11% or 0.11 j = 13% or 0.13 m=2

Solution:

n=tm n = 6(2) = 12

j 0.13
i= i= =0.065
m 2
r 0.11
b= b= =0.045
m 2
K = Fb k = 75,000(0.55) = 4,125
−12
P=75,000 ( 1+0.065 ) + 4125 ¿
−12
P=75,000 ( 1.065 ) + 4125 ¿

P=75,000 ( 0.4696828549 )+ 4,125 ( 8.8386190935 )

P=35,336.214 0792499 + 36,459.303760687 = 71,685.51