AT&T, Dell, and IBM Week four: assignment 3 Accounting | Cost Account

AT&T, Dell, and IBM Week four: assignment 3 Accounting | Cost Account

Week four: assignment 3
Week 4:  You are given the following data on bonds from
AT&T, Dell, and IBM. Each bond has a par value of $1000.
AT&T
Dell    
IBM
Coupon          
6.80   
6.50   
8.375%
Maturity         
05/15/2036    
04/15/2038    
11/01/2019
Frequency      
Semiannual    
Semiannual    
Semiannual

Rating

A       
A-      
A+

 1.        Calculate the value of the bond if your required return is 5 percent on AT&T, 6.5 percent on Dell, and 8 percent on IBM.
2.        Determine the yield to maturity (YTM) on the bonds given the following prices.
AT&T
Dell    
IBM
Price  
$1,060.00      
$1,016.57    
$1,307.78

 1.        Based on each bond’s ratings and your determination of its yield to maturity
explain how you rank each bond for risk and return.
2.       Assume you had $10,000 to invest.  How many of each bond would you have?
·         What dollar amount of interest would each bond return on the investment for the next year?
·         What would your percentage return be for the year, that is, your  interest payments divided by the total amount invested?
You must submit your  backup in Excel or other supporting documentation showing how answers were
reached.