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Managerial Finance 5qs

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P6-4
Intercontinental Baseball Manufacturers has an outstanding bond with a $1,000
face value that matures in 10 years. The bond, which pays $25 interest every six months $50 per year, is currently selling for 598.55 What is the bond's yield to maturity.

P6-7
Rick bought a bond when it was issued by Macroflex Corporation 14 years ago.
The bond, which has a 1,000 face value and a coupon rate equal to 10%
matures in 6 years. Interest is paid every six months; the next interest payment is
scheduled for 6 months from today. If the yield on similar risk investments is
14% what is the current market value (price) of the bond?

P6-10
It is now January 2, 2012, and you are considering the purchase of an outstanding Puckett Corporation
bond that was issued on January 4, 2010. The Puckett bond has a 9.50%
annual coupon and a 30 year original maturity (it matures on December 30, 2039). Interest
rates have declined since the bond was issued, and the bond is currently selling for $1,165.75
. What is the yield to maturity in 2012 for the Puckett bond? The bond's face value is $1,000

P6-12
Robert paid 1,000 for a 10 year bond with a coupon rate equal to
8% when it was issued on January 2. If Robert sold the bond at the end of the year in which
it was issued for a market price of 925 what return would he earn? What portion of this
return represents capital gains, and what portion represents the current yield?

P6-17
Tapley Corporation's 14% coupon rate, semiannual payment, $1,000 par value
bonds mature in 30 years. The bonds sell at a price of $1,353.54
, and their yield curve is at. Assuming that interest rates in the general economy are expected
to remain at their current level, what is the best estimate of Tapley's simple interest rate on new bonds?

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