| Calculate the firm’s aftertax cash outflows for the first year under the two different scenarios. (Do not round intermediate calculations. Input a cash outflow as a negative value and a cash inflow as a positive value. Enter your answers in dollars, not millions of dollars (e.g., 1,234,567). Round your answers to 2 decimal places (e.g., 32.16).) |
| Coupon bond cash flow | $ [removed] |
| Zero coupon bond cash flow | $ [removed] |
| To calculate the number of years until maturity, assume that it is currently May 2013. |
| Rate | Maturity Mo/Yr |
Bid | Asked | Chg | Ask Yld |
| ?? | May 18 | 103.5362 | 103.8235 | +.3204 | 2.18 |
| 5.850 | May 23 | 104.1762 | 104.3850 | +.4513 | ?? |
| 6.125 | May 36 | ?? | ?? | +.6821 | 3.87 |
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| Required: |
| In the above table, find the Treasury bond that matures in May 2023. What is your yield to maturity if you buy this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Yield to maturity | [removed]% |
| Below, you will find Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2013. |
| Rate | Maturity Mo/Yr |
Bid | Asked | Chg | Ask Yld |
| ?? | May 18 | 103.5362 | 103.8235 | +.3204 | 2.18 |
| 5.850 | May 23 | 104.1762 | 104.3850 | +.4513 | ?? |
| 6.125 | May 36 | ?? | ?? | +.6821 | 3.87 |
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| Requirement 1: |
| In the above table, find the Treasury bond that matures in May 2036. What is the asked price of this bond in dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Asked price | $ [removed] |
| Requirement 2: |
| If the bid-ask spread for this bond is .0628, what is the bid price in dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Bid price | $ [removed] |
| To calculate the number of years until maturity, assume that it is currently May 2013. |
| Rate | Maturity Mo/Yr |
Bid | Asked | Chg | Ask Yld |
| ?? | May 18 | 103.5362 | 103.8235 | +.3204 | 2.18 |
| 5.850 | May 23 | 104.1762 | 104.3850 | +.4513 | ?? |
| 6.125 | May 36 | ?? | ?? | +.6821 | 3.87 |
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| Required: |
| In the above table, find the Treasury bond that matures in May 2018. What is the coupon rate for this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Coupon rate | [removed]% |
| To calculate the number of years until maturity, assume that it is currently January 15, 2013. |
| Company (Ticker) |
Coupon | Maturity | Last Price |
Last Yield |
EST $ Vol (000’s) |
| Xenon, Inc. (XIC) | 5.400 | Jan 15, 2020 | 94.183 | ?? | 57,362 |
| Kenny Corp. (KCC) | 7.125 | Jan 15, 2017 | ?? | 6.02 | 48,941 |
| Williams Co. (WICO) | ?? | Jan 15, 2026 | 94.735 | 6.85 | 43,802 |
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| Required: |
| What is the yield to maturity for the bond issued by Xenon, Inc.? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g.,32.16).) |
| Yield to maturity | [removed]% |
| To calculate the number of years until maturity, assume that it is currently January 15, 2013. |
| Company (Ticker) |
Coupon | Maturity | Last Price |
Last Yield |
EST $ Vol (000’s) |
| Xenon, Inc. (XIC) | 5.400 | Jan 15, 2020 | 94.183 | ?? | 57,362 |
| Kenny Corp. (KCC) | 7.125 | Jan 15, 2017 | ?? | 6.02 | 48,941 |
| Williams Co. (WICO) | ?? | Jan 15, 2026 | 94.735 | 6.85 | 43,802 |
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| Requirement 1: |
| What price would you expect to pay for the Kenny Corp. bond? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Price | $ [removed] |
| Requirement 2: |
| What is the bond’s current yield? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Current yield | [removed]% |
| To calculate the number of years until maturity, assume that it is currently January 15, 2013. |
| Company (Ticker) |
Coupon | Maturity | Last Price |
Last Yield |
EST $ Vol (000’s) |
| Xenon, Inc. (XIC) | 5.400 | Jan 15, 2020 | 94.183 | ?? | 57,362 |
| Kenny Corp. (KCC) | 7.125 | Jan 15, 2017 | ?? | 6.02 | 48,941 |
| Williams Co. (WICO) | ?? | Jan 15, 2026 | 94.735 | 6.85 | 43,802 |
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| Required: |
| What is the coupon rate for the Williams Co. bond? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Coupon rate | [removed]% |
| Nofal Corporation will pay a $4.60 per share dividend next year. The company pledges to increase its dividend by 6.75 percent per year, |
