Question
Please note that if you edit your initial response (Original Post), you will not get
credit for the Original Post. The discussions are set up as "Must post first".
Bond Pricing.
Go to:
Lockheed Martin
https://www.nyse.com/quote/ARCX:LMT18
In your initial response to the topic you have to answer all 8 questions.
1.
2.
3.
4.
5.
6. 7.
8. Copy the quotation of one bond that contains the price “Last Trade Price”.
Present these quotations in your posting.
Describe the information that you received from the quote of the bond. You have
to explain each number and symbol that appears in the bond quotation.
Assume that par value of the bond is $1,000. What was the last price of the bond
in $$$ (listed in Last Trade Price)?
Assume that par value of the bond is $1,000. Calculate annual coupon interest
payments.
Assume that par value of the bond is $1,000. Calculate current yield of the bond.
Assume that par value of the bond is $1,000. Assume annual coupon payments.
Calculate YTM of the bond using the last price (listed in Last Trade Price). (Round the
number of years to the whole number). You should use Excel or financial calculator.
Show your work.
Describe one major shortcoming for YTM and current yield.
How would the following affect the yield on newly issued bond? Please explain
your answer.
a)
The bonds are callable.
b)
The bonds are subordinated to the existing bond issue.
c)
The bond rating is better or worse than the Moody’s Aa3 that the company
anticipates.