# 2024 – 1 Heath Foods bonds have 6 years remaining to maturity The bonds have a face value of

Finance H.W (6 questions) – 2024

2024 – 1 Heath Foods bonds have 6 years remaining to maturity The bonds have a face value of.

1-Heath Foods’ bonds have 6 years remaining to maturity. The bonds have a face value of \$1,000 and a yield to maturity of 11%. They pay interest annually and have a 7% coupon rate. What is their current yield? Round your answer to two decimal places.

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2-Renfro Rentals has issued bonds that have a 6% coupon rate, payable semiannually. The bonds mature in 7 years, have a face value of \$1,000, and a yield to maturity of 9.5%. What is the price of the bonds? Round your answer to the nearest cent.

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What is their yield to call?

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5-An investor has two bonds in his portfolio. Each bond matures in 4 years, has a face value of \$1,000, and has a yield to maturity equal to 9.7%. One bond, Bond C, pays an annual coupon of 11%; the other bond, Bond Z, is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 9.7% over the next 4 years, what will be the price of each of the bonds at the following time periods? Assume time 0 is today. Fill in the following table. Round your answers to the nearest cent.

t Price of Bond C Price of Bond Z
0 \$  [removed] \$  [removed]
1 [removed] [removed]
2 [removed] [removed]
3 [removed] [removed]

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6- Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a \$1,000 par value, a 10% coupon rate, and semiannual interest payments.

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1. Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 8%. At what price would the bonds sell? Round the answer to the nearest cent.
\$  [removed]
2. Suppose that 2 years after the initial offering, the going interest rate had risen to 13%. At what price would the bonds sell? Round the answer to the nearest cent.
\$  [removed]
[removed]

[removed]

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