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# BBA 3310 Unit VI Assignment

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BBA 3310 Unit VI AssignmentInstructions: Enter all answers directly in this worksheet. When finished select Save As, and save thisdocument using your last name and student ID as the file name. Upload the data sheet to Blackboard asa .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 maturityon a comparable-risk bond is 12 percent. Round to the nearest cent.The value of the bond isQuestion 2: (10 points). (Bond valuation) Enterprise, Inc. bonds have an annual coupon rate of 11percent. The interest is paid semiannually and the bonds mature in 9 years. Their par value is \$1,000. Ifthe market's required yield to maturity on a comparable-risk bond is 14 percent, what is the value of thebond? 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 isb. The value of the Enterprise bonds if the interest is paid annually is\$\$Question 3: (10 points). (Yield to maturity) The market price is \$750 for a 20-year bond (\$1,000 parvalue) that pays 9 percent annual interest, but makes interest payments on a semiannual basis (4.5percent semiannually). What is the bond's yield to maturity? (Round to two decimal places.)The bond's yield to maturity is%Question 4: (10 points). (Yield to maturity) A bond's market price is \$950. It has a \$1,000 par value, willmature in 14 years, and has a coupon interest rate of 8 percent annual interest, but makes its interestpayments semiannually. What is the bond's yield to maturity? What happens to the bond's yield tomaturity if the bond matures in 28 years? What if it matures in 7 years? (Round to two decimal places.)The bond's yield to maturity if it matures in 14 years isThe bond's yield to maturity if it matures in 28 years isThe bond's yield to maturity if it matures in 7 years is%%%Question 5: (15 points). (Bond valuation relationships) Arizona Public Utilities issued a bond that pays\$70 in interest, with a \$1,000 par value and matures in 25 years. The markers required yield to maturityon a comparable-risk bond is 8 percent. (Round to the nearest cent.) For questions with two answeroptions (e.g. increase/decrease) choose the best answer and write it in the answer block.Questiona. What is the value of the bond if the markers required yield to maturity on a comparable-riskbond is 8 percent?b. What is the value of the bond if the markers required yield to maturity on a comparable-riskbond increases to 11 percent?Answer\$\$c.

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