You find the following corporate bond quotes. To calculate the number of years until maturi

You find the following corporate bond quotes. To calculate the number of years until maturi

1. Consider the following two mutually exclusive projects:

Year
Cash Flow (X)
Cash Flow (Y)
0
-$16700
-$16700
1
6630
7130
2
7210
7810
3
4730
3470
What is the IRR (%) of Project X?

What is the IRR (%) of Project Y?

What is the crossover rate (%) for these two projects?

2. You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000.

Company
(Ticker)
Coupon
Maturity
Last
Price
Last
Yield
EST $ Vol
(000’s)
Xenon, Inc. (XIC)
7.300
Jan 15, 2039
94.373
??
57,381
Kenny Corp. (KCC)
7.310
Jan 15, 2038
??
5.52
48,960
Williams Co. (WICO)
??
Jan 15, 2045
94.925
7.22
43,821
 
What price would you expect to pay for the Kenny Corp. bond?

 

 

 

 

 
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