Bond Example 1 Two years ago Jamaica Jim’s Cruise Lines (BB bond rating) issued $100m worth of $1,000 bonds with an original maturity of 4 years and annual.

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Bond Example 1 Two years ago Jamaica Jim’s Cruise Lines (BB bond rating) issued $100m worth of $1,000 bonds with an original maturity of 4 years and annual coupon payments. The bonds have a CPN Rate of 6% since that was the cost of debt (market interest rate, r d ) for a 4-year loan for all BB rated firms at the time. The current market interest rate (rd) for BB bonds with 2 year maturity is 5%. (i.e. the current cost of a 2-year loan for all BB rated firms is 5%). What is the current fair market value of these bonds?

Bond Example 2 Multiple compounding periods per year: What is the current fair market value of a 3-year, $10,000 Face Value bond that has a coupon rate of 6% and has semiannual coupon payments? The current market interest rate (rd) for this bond is 7%.

Bond Example 3 The current price of a 4-year, $10,000 AA bond issued by GM paying an annual coupon rate of 5% APR. is $9, What is the yield to maturity (YTM) of this bond?

Bond Example 4 The current FMV of a $1,000 BB bond issued by Home Depot paying a semi-annual coupon rate of % APR with 2 years left to maturity is $ What is the yield to maturity of this bond?

Bond Example 5 Company x has a $1000 semiannual bond with a 8% coupon rate, 10 years to maturity. – If the current market price is , what is the yield to maturity? – If the market rate changes to 9%, what is the value of the Bond?

Bond Example 6 A Bond paying an annual coupon of 7% has thirty years until maturity: – If the market rate is currently 6.5%, what is the price of the bond? This bond is said to be trading at?

Bond Example 7 A $1000 face value bond with a maturity of 6 years and a 7.875% coupon rate paying quarterly interest payments is currently selling for $ What is the yield to maturity of the bond?

Bond Example 8

Bond Example 9

Bond Example 10 A $1000 face value bond with a maturity of 11.5 years and a 8.0% coupon paying semi-annual interest payments is selling at 92.50% of face value, It has 11.5 years to maturity. What is the YTM of this bond?