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Theory in Corporate Finance Excel Assignment-1

The document contains calculations of bond prices, yields, durations and modified durations for different coupon rates, start dates, end dates and yields. It also contains calculations of internal rate of return (IRR) for different cash flow projects with multiple inflows and outflows over time. The key information provided are bond pricing and yield calculations for given inputs and IRR percentages for sample cash flow projects ranging from 36% to 42% to 9%.

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niveditawagh88
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20 views

Theory in Corporate Finance Excel Assignment-1

The document contains calculations of bond prices, yields, durations and modified durations for different coupon rates, start dates, end dates and yields. It also contains calculations of internal rate of return (IRR) for different cash flow projects with multiple inflows and outflows over time. The key information provided are bond pricing and yield calculations for given inputs and IRR percentages for sample cash flow projects ranging from 36% to 42% to 9%.

Uploaded by

niveditawagh88
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Q.

1)
Coupon rate 8.5%
Start Date 1-Feb-09
End Date 1-Feb-20
Yield 3.2976%
Redemption 100

Price of the bond


147.67

PV -147.67

Coupon rate 8.5%


Start Date 1-Feb-09
End Date 1-Feb-20
Yield 4%
Redemption 100

Price of the bond


139.73

PV
-139.73

Q.2)
Coupon rate 3.50%
Start date 1-Feb-09
Maturity 1-Feb-18
Price 107.46875%
Redemption 1000
Price 1074.6875

YLD 1.6578

Rate 1.2827%

Coupon rate 3.50%


Start date 1-Feb-09
Maturity 1-Feb-18
Price 110%
Redemption 1000

YLD 1.6241

Rate Err:523

Q.3)
Coupon Rate 8.5
Start Date 1-Feb-09
End Date 1-Feb-20
Yield 3.2976%

Duration
5.5

Coupon Rate 8.5


Start Date 1-Feb-09
End Date 1-Feb-20
Yield 4%

Duration 5.4

As the yield increases, duration decreases as they inversely proportional. Bond prices are less sensitive to changes in interest r

Q.4)
Coupon Rate 8.5
Start Date 1-Feb-09
End Date 1-Feb-20
Yield 4%

Modified Duration 5.2951


Duration 5.4010
Modified Duration 529.5% 0.02 1.02

Coupon Rate 7.5


Start Date 1-Feb-09
End Date 1-Feb-20
Yield 4%

modified duration 5.30


duration 5.41
modified duration 5.30
ensitive to changes in interest rates compared to yield.
Q.1)
Project C0 C1 C2 C3
F -10,000 6,000 6,000 6,000

IRR 36%

Q.2)
C0 C1 C2 C3
-5,000 2,200 4,650 3,330

IRR 42%

Q.3)
C0 C1 C2 C3 C4 C5 C6
-215,000 0 0 0 185,000 85,000 43,000

IRR 9%

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