By how much does the principal of the bond increase

Assignment Help Financial Management
Reference no: EM131013858

A 8-year bond has a par value of $1,000 and a coupon rate of 5 percent. During the first six months after the bond was Issued, the inflation rate was 1.3 percent. By how much does the principal of the bond increase? What is the coupon payment after six months?

Reference no: EM131013858

Questions Cloud

Equivalent uniform annual worth : Charleston Industries is trying to decide if expanding to a new product line would be worth the investment. The new line is estimated to have annual expenses of $28731 and annual profits of $97695. What is the equivalent uniform annual worth (EUAW) o..
What is the equivalent uniform annual worth of project : A small company has a choice between 2 projects. Because the company is highly specialized, it picks its projects carefully. Project A has annual expenses of $556 and annual profit of $23340. The project will last for 5 years. Comparing the two proje..
In what ways have some of the approaches differed : Briefly describe some similarities and differences between GAAP and IFRS with respect to the accounting for liabilities.
Differentiate between the concept of accrued expense : Differentiate between the concept of accrued expense and accrued revenue.
By how much does the principal of the bond increase : A 8-year bond has a par value of $1,000 and a coupon rate of 5 percent. During the first six months after the bond was Issued, the inflation rate was 1.3 percent. By how much does the principal of the bond increase? What is the coupon payment after s..
Entity''s operating cycle if the cycle is longer than a year : What is the term used to describe a debt due to be paid within one year or within the entity's operating cycle if the cycle is longer than a year
The prevailing annualized yield on other bonds : A 2-year bond has a par value of $1,000 and a semiannual coupon rate of 5 percent. The prevailing annualized yield on other bonds with similar characteristics is 7 percent. What is the appropriate market price of the bond?
Estimate the maximum error in the calculated area : The length x and width y of a rectangle are measured as 27 cm and 28 cm, respectively. Estimate the maximum error ΔA in the calculated area A = xy of the rectangle.
What factors or components go into the balance sheet : What factors or components go into the balance sheet?

Reviews

Write a Review

Financial Management Questions & Answers

  Cost of equity and leverage for the all equity situation

XYZ Ltd is currently all equity financed with a market value of $1 million. Its management is considering the issue of bonds with a face value of $500,000 (issued at face value). The new funds raised will be used to repurchase shares from existing sh..

  What will the present value of his portfolio

Elliot makes $250,000 a year and pays 30% taxes on $150,000 and 35% on his remaining salary. His expenses are $110,000 (per year). He wants to invest a fixed amount EVERY day into an investment fund for 5 years and he hopes to get a 12% return. What ..

  No-arbitrage condition say about the price on the south pole

The stock PolarBear trades on both the South Pole Stock Exchange and the North Pole Stock Exchange. Suppose the price on the North Pole is $18. What does the No-Arbitrage Condition say about the price on the South Pole?

  Equilibrium with required return equal to expected return

A stock is trading at $65 per share. The stock is expected to have a year-end dividend of $5 per share (D1 = $5), and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 11% (assume the market is in ..

  Municipal bond is currently priced to yield

A 5.5% 20 year municipal bond is currently priced to yield 7.2%. For a taxpayer in the 33% marginal tax bracket , this bond would offer an equivalent taxable yield of what?

  Ratios best links the income statement to the balance sheet

Within the context of forecasting, which of the following ratios best links the income statement to the balance sheet?

  Understand product value and the competitive environment

In this assignment you will write a blog about research tools that can help a marketer understand product value and the competitive environment.

  Weighted average cost of capital for use capital budgeting

Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting?

  What is the yield on a five year bond

The risk free rate of interest is 2.5%. Inflation is expected to be 1.6% this year, 2% next year and 3% the following years. Assume the maturity risk premium is calculated to be .15x (t-1)% default risk premium is fixed at 1% and liquidity premium is..

  Learned from the subprime mortgage meltdown

What lessons can be learned from the subprime mortgage meltdown? Could a similar crisis occur (perhaps in the student loan market) in the future? Were the big banks the only ones responsible?

  Two determinants of the growth rate in dividends

What are the two determinants of the growth rate in dividends?

  The foregoing transactions using accounting equation

Here is a list of transactions for a newly-formed corporation that provides professional tax services: Organized the business as a professional corporation, investing $28,000 cash in the business and issuing 1,000 shares of no-par common stock. Recei..

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