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Suppose Wolverine Steel Company wishes to issue a $100,000 bond with a maturity of 4 years to raise $78,101. The market requires a yield to maturity (YTM) of 11.0% for this company's borrowing/debt. How much coupon will the company have to pay every six months? (Enter just the number in dollars without the $ sign or a comma and round off decimals to the closest integer, i.e., rounding $30.49 down to $30 and rounding $30.50 up to $31.)

 

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Related questions

Jiminy’s Cricket Farm issued a bond with 15 years to maturity and a semi-annual coupon rate of 8 percent 3 years ago. The bond currently sells for 96 percent of its face value and has a yield to maturity of 8.54%. The book value of the debt issue is $60 million.

In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years left to maturity. The book value of this issue is $35 million, the bonds sell for 51 percent of par, and their yield to maturity is 6.85%.

A. What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)
A. Total book value $

B.What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)
B. Total market value $

C. The company’s marginal tax rate is 35 percent. What is the after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
C. Cost of debt %

What is the yield to maturity (YTM) of a zero coupon bond with a face value of $1,000, current price of $940 and maturity of 9 years? Recall that the compounding interval is 6 months and the YTM, like all interest rates, is reported on an annualized basis.

1) Price the following bonds when the market rate of return is 8%:

A $1000 bond with an annual coupon of 10% with a maturity date of 10 years

A $1000 bond with an annual coupon of 8% with a maturity date of 10 years

A $1000 bond with an annual coupon of 6% with a maturity date of 10 years

A $1000 bond with a semi- annual coupon of 8% with a maturity date of 10 years

please show calculation

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