Nellie is evaluating a potential bond purchase (Graded A+) - use as a guide only - 27869

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  • Posted on: Sun 06 Oct, 2013
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1.    Nellie is evaluating a potential bond purchase that the seller purchased 12 years ago for $4,000.  The bond matures 8 years from today.  It has a face value of $10,000, pays quarterly coupons with a coupon rate of 1%.  To make a yield to maturity of 10% EAR, what is the most Nellie should pay for the bond.

a.     please use excel or detail word explanation to answer question

2.    The Income and Balance Statements for the XYZ company is shown below for 2011 and 2012.  What conclusions for a potential investor can be drawn from these? Explain how you arrived at your conclusions. 



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