Evergrande Group issued $100 million face value bonds on January 1, 2012. The bonds carry a coupon rate of 6% with annual coupon payment. The bond matures on January 1, 2022. a) Determine the market value of the bond issued on January 1, 2012, if it was priced to produce a yield (YTM) of 10% compounded annually on that date. [Note: Round your final answer to 2 decimal places] b) Assume the bond is sold on January 1, 2013, with an increase in the yield of 1% to 11% compounded annually on that date. Calculate the (i) Current yield (on Jan 1, 2012) (ii) 1-year Yield on capital gain/loss (iii) 1-year Holding period yield [Note: Round your final answer to two decimal places]

Evergrande Group issued $100 million face value bonds on January 1, 2012. The bonds carry a coupon rate of 6% with annual coupon payment. The bond matures on January 1, 2022. a) Determine the market value of the bond issued on January 1, 2012, if it was priced to produce a yield (YTM) of 10% compounded annually on that date. [Note: Round your final answer to 2 decimal places] b) Assume the bond is sold on January 1, 2013, with an increase in the yield of 1% to 11% compounded annually on that date. Calculate the (i) Current yield (on Jan 1, 2012) (ii) 1-year Yield on capital gain/loss (iii) 1-year Holding period yield [Note: Round your final answer to two decimal places]

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 16E

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