Calculate the fair present values of the bonds

Assignment Help Financial Management
Reference no: EM131444286

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 10 years remaining to maturity, and have a required rate of return of 15.5 percent.

a. The bond has a 7.2 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Fair present value $

b. The bond has a 9.2 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Fair present value $

c. The bond has a 15.5 percent coupon rate. (Do not round intermediate calculations.) Fair present value $

Reference no: EM131444286

Questions Cloud

Content video games direct is modeling out next five years : Create Spreadsheet on excel Content Video games direct is modeling out the next 5 years of revenues, expenses and profits based on the following assumptions: Revenue = $100,000 in year 1 and expected to grow 10%/year through year 5 Expenses = $50,000..
Determine the fair present value of the bond : BSW Corporation has a bond issue outstanding with an annual coupon rate of 5.2 percent paid quarterly and four years remaining until maturity. The par value of the bond is $1,000. Determine the fair present value of the bond if market conditions just..
Yield curve in the wall street journal : You note the following yield curve in The Wall Street Journal. According to the unbiased expectations theory, hat is the 1-year forward rate for the period beginning one year from today, 2f1?Yu note the following yield curve in The Wall Street J You ..
What is required rate of return : Preferred stock valuation Fee Founders has perpetual preferred stock outstanding that sells for $38.00 a share and pays a dividend of $4.00 at the end of each year. What is the required rate of return?
Calculate the fair present values of the bonds : Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 10 years remaining to maturity, and have a required rate of return of 15.5 percent. The bond has a 7.2 percent coupon ..
What is expected dividend per share for each of next years : Boehm Incorporated just paid a dividend of $1.50 a share ( =$1.50). this dividend is expected to grow 5% a year for the next 3 years and then 10% a year thereafter. What is the expected dividend per share for each of the next 5 years?
Fund suitable for you to save money for your retirement : Select a fund suitable for you to save money for your retirement. You are beginning to save today, and intend to contribute to the fund monthly throughout your career. Using the historical 5-year return number, how much would you need to save each mo..
What is the required rate of return : Constant growth valuation Harrison Clothiers' stock currently sells for $28 a share. It just paid a dividend of $3.25 a share (that is, D0 = 3.25). The dividend is expected to grow at a constant rate of 5% a year. What stock price is expected 1 year ..
Calculate its basic earning power and its return on equity : Broward Manufacturing recently reported the following information: Net income $500,000 ROA 11% Interest expense $150,000 Accounts payable and accruals $1,050,000 Broward's tax rate is 30%. Broward finances with only debt and common equity, so it has ..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Flotation costs-what is the cost of preferred stock

Burnwood Tech plans to issue some $60 par preferred stock with a 8% dividend. A similar stock is selling on the market for $70. Burnwood must pay flotation costs of 5% of the issue price. What is the cost of the preferred stock?

  What is the net present worth of the lease on the date

A warehouse is to be leased for $5000 per month under a 5 year lease. Payments are to be made on the first of the month. What is the net present worth of the lease on the date when the lease begins and the first paymentis due if the nominal interest ..

  Build the is-lm function

Build the IS-LM function - analyze the behavior of the markets for goods and money for each area.

  Approximate and exact expected real returns on the portfolio

Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .26 .26 .38 .55 Normal .50 .21 .19 .17 Bust .24 .05 −.38 −.46. If your portfolio is in..

  Firm manufactures and sells high quality printers and toners

A firm manufactures and sells high quality printers and toners. Each printer sells for $790 and each toner for $70. The average user keeps the printer for 5 years and consumes 4 toners every year. Using rate of return analysis to determine if a user ..

  The payback method is biased towards short-term projects

The internal rate of return is the most reliable method of analysis for any type of investment decision. The payback method is biased towards short-term projects. The modified internal rate of return is most useful when projects are mutually exclusiv..

  How will the price of the preferred stock be affected?

X-Tech Company issued preferred stock many years ago. It carries a fixed dividend of $14 per share. With the passage of time, yields have soared from the original 12 percent to 16 percent (yield is the same as required rate of return). a. What was th..

  Use skimming or penetration pricing strategy

Bayer Schering Pharma AG, Germany owns Alka-Seltzer, which was launched in 1931 and was meant for relief of minor aches, pains, inflammation, fever, headache, heartburn, sour stomach, indigestion, and hangovers. In your opinion, has Bayer positioned ..

  What would be the annual premium

Find the cost of a $95,000 endowment policy that has a 10-year term for a 57-year-old woman.- What would be the annual premium for a $150,000 endowment policy for 7 years for a 68-year-old man?

  What is the firms net float

ABC Company writes 269 checks a day for an average amount of $385 each. These checks generally clear the bank in 3 days. In addition, the firm generally receives an average of $128,596 a day in checks that are deposited immediately. Deposited funds a..

  Calculate the initial outlay and depreciable asset

A company is purchasing a new machine which will cost $130,000 with additional shipping costs of $5,000 and set up and installation costs of $12,000. An additional $8,000 in Net Working Capital will be required. Calculate the Initial Outlay (startup ..

  Offset the exchange risk associated with cost structure

Volkswagen almost went bankrupt in 1973 for all of the following EXCEPT it failed to offset the exchange risk associated with its cost structure and revenue structure with a suitable liability structure it gambled on the value of dollars it priced it..

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