Finance Assignment due 1/6 by midnight

----- Modified Instruction (01/06/2019 14:37:58) -----
Address all parts of the problem below. For those questions which require it, you need to show relevant calculations for each part of the problem, and those calculations should be done using Excel functions/formulas. Your explanations should also be placed in the same Excel workbook. Please upload only one Excel file with all of Name your file your last name_Assign#6. The due date is 11:59PM on Sunday, Jan. 6th. Late assignments are not accepted. The Valuation and Characteristics of Bonds Please answer the following: 1. Distinguish between debentures and mortgage bonds. 2. What factors determine a bond’s rating? Why is the rating important to the firm’s manager? 3. Hamilton, Inc. bonds have an 8 percent coupon rate. The interest is paid semiannually, and the bonds mature in 10 years. Their par value is $1,000. a. If your required rate of return is 4 percent, what is the value of the bond? b. If your required rate of return is 4 percent and interest is paid annually, what is the value of the bond? 4. ABC bonds have an annual coupon rate of 9 percent and a par value of $1,000 and will mature in 20 years. If you require a return of 7.5 percent, what price would you be willing to pay for the bond? What happens if you pay more for the bond? What happens if you pay less for the bond? 5. You own a bond that pays $80 in annual interest, with a $1,000 par value. It matures in 15 years and your required rate of return is 7 percent. What is the value of the bond? 6. XYZ Corp plans on issuing bonds that pay no interest but can be converted into $1,000 (you receive when bond matures), 7 years from their purchase. It is determined that they should yield 6.5%, compounded annually. What price should XYZ Corp sell the bonds?

----- Modified Instruction (03/21/2019 22:14:34) -----


----- Modified Instruction (01/06/2019 14:37:58) -----
Address all parts of the problem below. For those questions which require it, you need to show relevant calculations for each part of the problem, and those calculations should be done using Excel functions/formulas. Your explanations should also be placed in the same Excel workbook. Please upload only one Excel file with all of Name your file your last name_Assign#6. The due date is 11:59PM on Sunday, Jan. 6th. Late assignments are not accepted. The Valuation and Characteristics of Bonds Please answer the following: 1. Distinguish between debentures and mortgage bonds. 2. What factors determine a bond’s rating? Why is the rating important to the firm’s manager? 3. Hamilton, Inc. bonds have an 8 percent coupon rate. The interest is paid semiannually, and the bonds mature in 10 years. Their par value is $1,000. a. If your required rate of return is 4 percent, what is the value of the bond? b. If your required rate of return is 4 percent and interest is paid annually, what is the value of the bond? 4. ABC bonds have an annual coupon rate of 9 percent and a par value of $1,000 and will mature in 20 years. If you require a return of 7.5 percent, what price would you be willing to pay for the bond? What happens if you pay more for the bond? What happens if you pay less for the bond? 5. You own a bond that pays $80 in annual interest, with a $1,000 par value. It matures in 15 years and your required rate of return is 7 percent. What is the value of the bond? 6. XYZ Corp plans on issuing bonds that pay no interest but can be converted into $1,000 (you receive when bond matures), 7 years from their purchase. It is determined that they should yield 6.5%, compounded annually. What price should XYZ Corp sell the bonds?