Annual coupon bond with a current yield to maturity

Assignment Help Financial Management
Reference no: EM131445418

What is the intrinsic value of a $10,000 , 8% annual coupon bond with a current yield to maturity of 7.2% and which will mature in 10 years if the coupon payments are made semi-annually?

a. $10,834

b. $6,662

c. $10,557

d. $10,563

Reference no: EM131445418

Questions Cloud

Define a root cause analysis : Define a root cause analysis and when it is used. In the case study identify the incident and explain the problem that might trigger a root cause analysis.
Write an introduction with a thesis : Select four specific events or developments that span the years covered by this course, based on their impact on the topic. Two of the events must be from before 1945 and two events must be from after 1945. You must assess how the events in relati..
What is the game matrix : Each of two players must choose a number between 1 and 5. If a player's choice = opposing player's choice +1, she loses $2; if a player's choice ≥ opposing player's choice +2, she wins $1. If both players choose the same number the game is a draw.
What is the cost of external common? equity : A new common stock issue that paid a ?$1.50 dividend last year. The par value of the stock is? $15, and earnings per share have grown at a rate of 7 percent per year. This growth rate is expected to continue into the foreseeable future. The company m..
Annual coupon bond with a current yield to maturity : What is the intrinsic value of a $10,000 , 8% annual coupon bond with a current yield to maturity of 7.2% and which will mature in 10 years if the coupon payments are made semi-annually?
What is the mean milk production per milk cow in california : What is the mean milk production per milk cow in California? What is the standard deviation of the milk production per milk cow in California? Why should you use the mean and standard deviation to analyze this data?
Find the game matrix : Each player displays either one or two fingers and simultaneously guesses how many fingers the opposing player will show. If both players guess either correctly or incorrectly, the game is a draw.
Why does a centralized government become less centralized : How does a central government come to exert control over the resources within its territory? Why does a centralized government become less centralized? Or, why does a government fail to centralize in the first place? Consider at least two regions ..
What is this stream of cash flows worth today : Suppose that for each of the next 10 years you will receive $500. If the opportunity cost of capital is 2% how much is this stream of cash flows worth today? Suppose that one year from now you will receive $300 and that at the end of every year there..

Reviews

Write a Review

Financial Management Questions & Answers

  Evaluating alternative routes for new road

A state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a ormerly inaccessible region. Three mutually exclusive plans for routing the road provide different benefits, indicated in Table P10-19. The roads are as..

  Constant rate of growth dividend policy

Winter time adventures is going to pay an annual dividend of 2.86 a share on its common stock next year. This year the company paid a dividend of 2.75 a share. The company adheres to a constant rate of growth dividend policy. What will one share of t..

  How much free cash flow did the firm generate

Hartzell Inc. had the following data for 2010, in millions: Net income = $600; after-tax operating income [EBIT (1-T)] = $700; and Total assets = $2,000. Information for 2011 is as follows: Net income = $825; after-tax operating income [EBIT (1-T)] =..

  What should be the current stock price

Company Z’s earnings and dividends per share are expected to grow indefinitely (i.e. forever) by 5% per year. If next year’s dividend is $10 and the required rate of return is 10%, what should be the current stock price?

  Stock with an expected return

You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 16% and Stock Y with an expected return of 11%. If your goal is to create a portfolio with an expected return of 14.25%, how much money will you inve..

  What is your assessment of the profitability of your firm

What is your assessment of the profitability of your firm in the most recent year and how does your firms profitability compare with that of the competitor

  Cash balances as result of implementing the lockbox system

It takes Cookie Cutter Modular Homes, Inc., about six days to receive and deposit checks from customers. Cookie Cutter’s management is considering a lockbox system to reduce the firm’s collection times. What is the reduction in outstanding cash balan..

  Importing goods and maximizing value for shareholders

Felicia & Fred’s board has hired a new Chief Operating Officer (COO) to assist them in expanding their operations globally. A close friend of Fred’s from childhood, the new COO, has extensive experience in importing goods and maximizing value for sha..

  Return and the interest is compounded daily

You are saving for your child's education since you did not participate in the Texas Tomorrow Fund. Your child is turned one today. Starting next quarter, you will deposit $500 every quarter until you child turns 17. Your last payment will be on his ..

  What the rate each party will pay and receive from dealer

Explain how the following scenarios should be resolved: Murrays can borrow money at a fixed rate of 10.5 percent or a variable rate set at prime plus 2.25 percent. Fred’s can borrow money at a variable rate of prime plus 1.5 percent or a fixed rate o..

  Why are constructive dialogue-changing strategic direction

Why are constructive dialogue and/or changing strategic direction more difficult for a family business than other businesses, even though families are supposed to have closer relationships? Support your response with empirical evidence.

  What will be their optimal upper cash limit

Hollywood Shoes would like to maintain their cash account at a minimum level of $69,000, but expect the standard deviation in net daily cash flows to be $5,900; the effective annual rate on marketable securities to be 7.00 percent per year; and the t..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd