lease show me how i calculate this using excel formulas with the following information (I need to know how much I would pay for this bond): Par value of bond: $1000 Coupon rate: 4% discount rate: 6% Maturity in years: 15
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Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
This is not a writting assignment...do not send this back saying otherwise!!!!!
Please show me how i calculate this using excel formulas with the following information (I need to know how much I would pay for this bond):
Par value of bond: $1000
Coupon rate: 4%
discount rate: 6%
Maturity in years: 15
Step by step
Solved in 4 steps with 2 images
- a. Reset the Data Section to its initial values. The price of this bond is 1,407,831. What would it be if there were only 9 or 8 years to maturity? Use the worksheet to compute the bond issue prices and enter them in the spaces provided. Bond issue price (9 years to maturity) __________________ Bond issue price (8 years to maturity) __________________ b. Compare these prices to the bond-carrying values found in the effective interest amortization schedule you originally printed out in requirement 3. Explain the similarity. c. Click the Chart sheet tab. The chart presented shows the price behavior of this bond based on years to maturity. Explain what effect years to maturity has on bond prices. Check your explanation by trying 8% as the effective rate (cell E10) and clicking the Chart sheet tab again. Also try 9%. When the assignment is complete, close the file without saving it again. Worksheet. Modify the BONDS3 worksheet to accommodate bonds with up to 20-year maturity. Use your new model to determine the issue price and amortization schedules of a 2,000,000, 18-year, 10% bond issued to yield 9%. Preview the printout to make sure that the worksheet will print neatly, and then print the worksheet. Save the completed file as BONDST. Hint: Expand both amortization schedules to 20 years. Expand the scratch pad to 20 years. Modify FORMULA1 in cell F17 to include the new ranges. Chart. Using the BONDS3 file, prepare a line chart that plots annual interest expense over the 10-year life of this bond under both the straight-line and effective interest methods. No Chart Data Table is needed. Put A23 to A32 in the Label format and then select A23 to A32, D23 to D32, and B40 to B49 as a collection. Enter all appropriate titles, legends, formats, and so forth. Enter your name somewhere on the chart. Save the file again as BONDS3. Print the chart.Determine the price of a single bond given the following information. Round your final answer to two decimal places. For example, if your answer is $89.12, enter 89.12 with no currency symbol. 4.39% Cost of Debt (Kd) The company is expected to pay the following forecasted CFFD (Cash Flows For Debt): Year 1: $50.00 interest payment Year 2: $50.00 interest payment Year 3: $50.00 interest payment Year 4: $50.00 interest payment Year 5: $50.00 interest payment The company will also pay the bond's face value of $1,000.00 at the end of year 5. The company faces a 25% tax rate. Type your answer...Listen Assume that there is a bond that pays $20.00 at the and of year 2, and $105.00 at the end of year 7. It sells at a total =$(20.00+105.00). The Macauley duration of the bond is? Answer with two digits decimal accuracy. Blank Excel Worksheet Your Answer
- You consider purchasing bonds today. There are three future time periods, t = 1, 2, 3, wherebonds can have payoffs. Consider the following 4 bonds: a) One amortizing bond paying $40 each period trading at a price of $104.95.b) One amortizing bond paying less in early periods and more in later periods. The bond pays $40 inperiod 1, $30 in period 2, and $20 in period 3. This bond is trading at a price of $80.61.c) One coupon bond with a 11% coupon rate trading at a price of $96.08.d) One zero coupon, which currently trades at a price of $77.22. Suppose you can take long or short positions in any bond, and also lend or borrow money. Is it possibleto construct an arbitrage trade where you pay nothing upfront, and get a certain payoff in period 1? If so,describe how you would do this trade.Calculate the value of each bond and discuss whether it sells at par, discount, or premium. (Annual interest rate) O A. Bond Bond Value A B C O B. Bond A B C O C. Bond A B с O D. Bond A B C $1,149.39 Discount $1,000.00 Par $85.60 Premium Bond Value Sells at par/discount/premium Bond Value $1,149.39 Premium $1,000.00 Par $85.60 Discount Sells at par/discount/premium Bond Value Sells at par/discount/premium $1,149.39 Premium $1,000.00 Par $85.60 Premium Sells at par/discount/premium $1,049.39 Premium $1,100.00 Premium $85.60 Discount Bond Par value Coupon interest Years to rate maturity JA B IC $1000 14% $1000 18% $100 10% 120 16 18 Required return 12% 8% 13%Calculate the accrued interest(in$) and the total purchase price(in$) of the bond, purchase round your answer to the nearest cent? (If you can’t see the market price on my paper it’s 79.75)
- Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Show Transcribed Text B) How could you construct a 1-year forward loan beginning in year 3? (Face Value) C) How could you construct a 1-year forward loan beginning in year 4? (Face Value) Required A Required B Complete this question by entering your answers in the tabs below. Face value Rate of synthetic loan → Show Transcribed Text Price $ 970.93 898.39 836.92 How could you construct a 1-year forward loan beginning in year 3? Note: Round your Rate of synthetic loan answer to 2 decimal places. Required A 776.20 685.42 Required B Face value Rate of synthetic loan Required C 7.85 % Required C How could you construct a 1-year forward loan beginning in year 4? Note: Round your Rate of synthetic loan answer to 2 decimal places. Ċ 13.29 %This first table describes prevailing market interest rates. Market Data Yield 0.05 Required: Using the yield above and the information contained in the table below, please calculate the price and duration of the bond as well as all necessary steps. (Use cells A5 to B5 from the given information to complete this question.) Time Until Payment Payment Discounted Payment Weight Time × Weight 1.00 $30.00 2.00 $30.00 3.00 $30.00 4.00 $1,030.00 Price: DurationYou Answered Correct Answer You have a weird bond that will pay $428 in year 4 and $226 in year7. What is this bond's duration if the discount rate is 7.3? 5 4.8983 margin of error +/- 0.05
- (Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 8 years until maturity. You can purchase the bond for $1.115. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 3 percent?Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $750, calculate the interest rate that the bond would yield to a bond buyer. Show all work.Give typing answer with explanation and conclusion 1- Imagine the bond above displayed the following details: $10,000 Matures: January 31, 2030; Interest of $200 payable June 30 and December 31 of each year. Can you calculate the annual effective interest rate for this bond? a)2% b)4% c)6% d)One cannot tell.