User Account

All Pages

Present value of the stream of thirty

Assignment Help Finance Basics
Reference no: EM131041290

Suppose you recently paid $1000 for a new 30-year bond issued by the telecommunications company, Verizon. The coupon rate is 6 percent, and for the sake of simplicity, let's assume that the $60 is paid once a year at the end of the year. Given the 6 percent interest rate, the present value of the bond's face value of $1000 paid thirty years from now is approximately $175. What is the present value of the stream of thirty, annual $60 payments? You can calculate the answer easily enough, but there is a shortcut.

Answers:

  • $1,100
  • $825
  • $700
  • $350
  • $140

Reference no: EM131041290

Questions Cloud

A common problem during communication : A common problem during communication occurs when you encounter two stakeholders who have conflicting ideas about what the software should be. That is, you have mutually conflicting requirements. How can you address this problem
What is the total number of available memory locations : . What is the total number of available memory locations?
Investment gain in the course of the month : This right will cost them $1 per share, and the right is good for the next month. A month later, the shares are selling for $35. Assuming that the owner of the calls exercises her right to buy your shares, how much was your total investment gain..
Company with a large western european market : You have been assigned to advise a company with a large Western European market. Company management wants to open the Chinese market. What advice do you have for this company? Explain with scenario planning
Present value of the stream of thirty : Given the 6 percent interest rate, the present value of the bond's face value of $1000 paid thirty years from now is approximately $175. What is the present value of the stream of thirty, annual $60 payments? You can calculate the answer easily en..
Privately owned retirement community : A privately owned retirement community and nursing home facility employs nurses, nursing assistants, home care workers, cooks and food service employees, as well as custodians and groundskeepers. These employees submitted sufficient authorization car..
What constants are needed for block sizes of 64 and 128 bit : The second subkey is derived in the same manner from thefirst subkey.a. What constants are needed for block sizes of 64 and 128 bits?
Create a network for this project : Do not include summary tasks in the network (i.e., 1.3, Ceremony, is a summary task; 1.2, Marriage license, is not a summary task). Do not consider who would be doing the task in building the network. For example, do not arrange ?hiring a band? to..
Problem regarding the arbitrage opportunity : If Company B's stock price is currently $360 and its intrinsic value is $390, what should you do as an investor? A) Do nothing because there is no arbitrage opportunity here

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the difference between incremental innovation and

what is the difference between incremental innovation and radical innovation? offer one example of a radical

  How the imputation tax system works in australia

Briefly explain how the imputation tax system works in Australia by providing an example. Assume a 30% corporate tax rate and a 15% marginal tax rate for the investor.

  Construct a pro forma balance sheet

Pro forma balance sheet construction - Use the following industry average ratios to construct a pro forma balance sheet, for Carlos Menza, Inc.

  Wat is the net present value npv of the acquisition to dm

dublin medical dm a large established corporation with no growth in its real earnings is considering acquiring 100 of

  What is the companys weighted average cost of capital

What is the company's weighted average cost of capital?

  Should the firm undertake the healthy bottled water project

CWC has a 34% marginal tax rate. For the purposes of this project, working capital effects will be ignored.

  You friend has decided to buy a car that cost 15000 three

you friend has decided to buy a car that cost 15000 three banks offered to you loans all of them will give 15000 by

  Closed-end leases with required down payments

A leading supplier of grapes to the wine- producing industry in California, On the Vine Grapes, wants to expand its delivery services and expand its reach to market by increasing its current fleet of delivery trucks. Some of the older vehicles..

  Explain why investors may be attracted to high-risk

explain why investors may be attracted to high-risk investments such as exchange-traded derivatives global funds and

  Prepare a revised budget

Incremental Analysis Consider the production cost information for Santiago's Salsa in problem 1. The corporation is currently producing and selling 250,000 jars of salsa yearly.

  What is the current value of the company

Young Corporation expects an EBIT of $ 16,000 every year forever. The company currently has no debt, and its cost of equity is 15 percent.

  Discuss the history of us deficit in current accounts

Briefly discuss the history of US deficit in current and trade accounts and recent development in this deficit and how to understand the argument between USA and its major trade partners (German, Japan and China) about protectionism and currency m..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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