Financial Management Week 6 - Assignment 6.1 - Homework

FINANCIAL MANAGEMENT WEEK 6

Assignment 6.1 - Homework

Question 4:

Large organisations and businesses who needs money to invest in the new project or tasks. Providing loan tools such as bonds are used as the substitute way to raise the funds. Along with this, these funds are also known as the corporate bonds. However, these corporate bonds maturity life is from one year to hundred years.

Current maturity value of the bond is 1000$ with the 4.5 percent rate of interest

So, the current market value of lightning’s bond is 936.02$

Question 5:

A bond also can be defined as the investment for the fixed income in which stockholders’ finances money to an object by plagiarizing the reserves for the particular interest rate.

Nper = 4*2 = 8

PMT = 1000*5%*1/2 = 25

The current market value of Elite’s bond is 900$

Question 6:

Current market value of the bond = existing value of the coupon + present face value of the coupon

The market value of the FFL’ bond is 500$

Question 11:

The yield to maturity for the bonds if the current market price are as follows

1. 13.99 percent

2. 6.008 percent

Question 13:

(A) the bond’s yield to maturity is 6.999 percent (B) the bond yield to call is 17.775 percent.