Questions from General Finance

Q: At the beginning of the year, you bought a $1

At the beginning of the year, you bought a $1,000 par value corporate bond with a 6 percent annual coupon rate and a 10-year maturity date. When you bought the bond, it had an expected yield to maturi...

Q: ExxonMobil 20-year bonds pay 6 percent interest annually on a

ExxonMobil 20-year bonds pay 6 percent interest annually on a $1,000 par value. If the bonds sell at $945, what is the bonds’ expected rate of return?

Q: The Latham Corporation is planning on issuing bonds that pay no interest

The Latham Corporation is planning on issuing bonds that pay no interest but can be converted into $1,000 at maturity, 7 years from their purchase. To price these bonds competitively with other bonds...

Q: The market price is $900 for a 10-year bond

The market price is $900 for a 10-year bond ($1,000 par value) that pays 6 percent interest (6 percent semiannually). What is the bond’s expected rate of return?

Q: You own a bond that has a par value of $1

You own a bond that has a par value of $1,000 and matures in 5 years. It pays a 5 percent annual coupon rate. The bond currently sells for $1,100. What is the bond’s expected rate of return?

Q: Time Warner has bonds that are selling for $1,371

Time Warner has bonds that are selling for $1,371. The coupon interest rate on the bonds is 9.15 percent, and they mature in 21 years. What is the yield to maturity on the bonds? What is the current y...

Q: Citigroup issued bonds that pay a 5.5 percent coupon interest

Citigroup issued bonds that pay a 5.5 percent coupon interest rate. The bonds mature in 5 years. They are selling for $1,076. What would be your expected rate of return (yield to maturity) if you boug...

Q: Zenith Co.’s bonds mature in 12 years and pay 7

Zenith Co.’s bonds mature in 12 years and pay 7 percent interest annually. If you purchase the bonds for $1,150, what is your expected rate of return?