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BBA 3310 Unit VI Assignment

Instructions: Enter all answers directly in this worksheet. When finished select Save As, and save this

document using your last name and student ID as the file name. Upload the data sheet to Blackboard as

a .doc, .docx or .rtf file when you are finished.

Question 1: (10 points). (Bond valuation) Calculate the value of a bond that matures in 12 years and has

$1,000 par value. The annual coupon interest rate is 9 percent and the market's required yield to maturity

on a comparable-risk bond is 12 percent. Round to the nearest cent.

The value of the bond is

$814.20

Question 2: (10 points). (Bond valuation) Enterprise, Inc. bonds have an annual coupon rate of 11

percent. The interest is paid semiannually and the bonds mature in 9 years. Their par value is $1,000. If

the market's required yield to maturity on a comparable-risk bond is 14 percent, what is the value of the

bond? What is its value if the interest is paid annually and semiannually? (Round to the nearest cent.)

a. The value of the Enterprise bonds if the interest is paid semiannually is

b. The value of the Enterprise bonds if the interest is paid annually is

$849.10

$851.60

Question 3: (10 points). (Yield to maturity) The market price is $750 for a 20-year bond ($1,000 par

value) that pays 9 percent annual interest, but makes interest payments on a semi...

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