# Accounting

**Accounting**

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1:

Lycan, Inc., has 6 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments. |

Required: |

If the YTM on these bonds is 8 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Current bond price |

2:

The Timberlake-Jackson Wardrobe Co. has 7 percent coupon bonds on the market with nine years left to maturity. The bonds make annual payments. |

Required: |

If the bond currently sells for $1,038.50, what is its YTM? (Do not round intermediate calculations.Round your answer to 2 decimal places (e.g., 32.16).) |

Yield to maturity |

3:

Crossfade Co. issued 15-year bonds two years ago at a coupon rate of 6.9 percent. The bonds make semiannual payments. |

Required: |

If these bonds currently sell for 94 percent of par value, what is the YTM? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Yield to maturity |

4:

Volbeat Corporation has bonds on the market with 10.5 years to maturity, a YTM of 8.4 percent, and a current price of $945. The bonds make semiannual payments. |

Required: |

What must the coupon rate be on the bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Coupon rate |

5:

If Treasury bills are currently paying 4.1 percent and the inflation rate is 1.6 percent, what is the approximate and the exact real rate of interest? **(Do not round intermediate calculations.** **Round your answers to 2 decimal places (e.g., 32.16).)**

Approximate |

Exact

6:

Say you own an asset that had a total return last year of 15 percent. Assume the inflation rate last year was 2.5 percent. |

Required: |

What was your real return? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Real return:

7:

PK Software has 7.5 percent coupon bonds on the market with 22 years to maturity. The bonds make semiannual payments and currently sell for 97 percent of par. |

Requirement 1: |

What is the current yield on PK’s bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Current yield |

Requirement 2: |

What is the YTM? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Yield to maturity |

Requirement 3: |

What is the effective annual yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Effective annual yield |

8:

BDJ Co. wants to issue new 25-year bonds for some much-needed expansion projects. The company currently has 7.8 percent coupon bonds on the market that sell for $1,125, make semiannual payments, and mature in 25 years. |

Required: |

What coupon rate should the company set on its new bonds if it wants them to sell at par? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |

Coupon rate |

9.You find a zero coupon bond with a par value of $10,000 and 12 years to maturity. The yield to maturity on this bond is 4.9 percent. Assume semiannual compounding periods.

What is the price of the bond? **(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)**

Price

10.Yan Yan Corp. has a $10,000 par value bond outstanding with a coupon rate of 5.2 percent paid semiannually and 28 years to maturity. The yield to maturity of the bond is 4.3 percent.

What is the price of the bond? **(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)**

Price =