FINANCE-arriott Corporation originally issued a 9⅜ percent (9.375%) bond in 1987

Chapter 6 Problems

Problem 6

Marriott
Corporation originally issued a 9⅜ percent (9.375%) bond
in 1987. These $1,000 par value bonds
mature in three years. What is the
value of a Marriott Corporation bond at each of the following required rates
of return, assuming the investor will hold the bond to maturity? Assume the coupon is paid annually.

Par Value

n

i

$1,000

3

9.375%

Answer
in the space provided below:

7.000%

9.375%

12.000%

Problem 7

What
is the yield to maturity on a $1,000 par value 9⅜ percent (9.375%) Mattiott
Corporation bond if the investor buys the bonds at the following market
prices? Assume the coupon is paid
annually and the bond matures in three years.

Par Value

n

i

$1,000

3

9.375%

Answer
in the space provided below:

$1,025

$1,000

$950

Problem 8

What
is the value of a $1,000 par value 9⅜ percent (9.375%) Marriott Corporation
bond for each of the following rates of return, assuming the investor will
hold the bond to maturity? Assume the
coupon is paid semiannually (every six months) and the bond matures in 3
years.

Par Value

n

i

$1,000

3

9.375%

Answer
in the space provided below:

7.000%

12.000%

Problem 11

What
is the value of a share of Hospitality Properties Trust B $2.22 preferred
stock to an investor requiring the following rates of return? Assume dividends are paid annually.

Dividend (PMT)

$2.22

Answer
in the space provided below:

11.000%

9.000%

7.000%

Problem 12

What
is the yield to maturity on a share of Hospitality Properties Trust B $2.22
preferred stock if an investor buys the stock at the following market
prices? Assume dividends are paid
annually.

Dividend (PMT)

$2.22

Answer
in the space provided below:

$35.00

$25.00

$17.00