Principles of Finance: 1. “Fast and Loose Company has outstanding an 8 percent, four-year, $1,000-par-value bond on which interest

Principles of Finance:

1. “Fast and Loose Company has outstanding an 8 percent, four-year, $1,000-par-value bond on which interest is paid annually.If the market required rate of return is 8 percent, what is the market value of the bond?”

2. “Peking Duct Tape Company has outstanding a $1,000-face-value bond with a 14 percent coupon rate and 3 years remaining until final maturity. Interest payments are made semiannually. What value should you place on this bond if your nominal annual required rate of return is 14 percent?”

3. “A 3-year bond with 8% coupon rate and Rs.1000 face value has the yield to maturity of 8%. Assuming annual coupon payment, calculate the price of the bond.”


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