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You are a new analyst at Marshall Capital, and you are looking to purchase General Motors bonds for an investment. The bonds are currently selling for $1253 and have a yield to maturity of 8%. The bond will mature in 10 years and makes semiannual coupon payments.
a) What is the coupon rate of these bonds?
b) What is the current yield on this bond?
c) In a year, suppose that investors gain confidence in the market and believe that it has come less risky. This results in a shift in the market rate from 8% to 6%. What would you be willing to pay for the same bond? Is the bond selling at a discount of premium?
You expect that interest rates will fall sharply during the year and want to reduce your bank's risk position. The current yield curve is inverted with long- term rates below short- term rates that FSB loses in year two if rates either rise or fall s..
Bryan Corporation has current liabilities of $340,000, a quick ratio of 1.8, inventory turnover ratio of 4.2, and a current ratio of 3.3. What is the cost of goods sold for the firm?
Morgan Contractors borrowed $2.60 million at an APR of 5.0 percent. The loan called for a compensating balance of 9 percent. What is the effective interest rate on the loan?
You are concerned about your retirement portfolio and want to start planning. You figure you will retire in exactly 42 years and then live another 30 years. During retirement, you want to be able to take out $7,000 per month for the first 15 years an..
Consider an asset that costs $970,000 and is depreciated straight-line to zero over its ten-year tax life. The asset is to be used in a seven-year project; at the end of the project, the asset can be sold for $136,400. If the relevant tax rate is 40 ..
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The stock of Hammond corp. has a covariance with the market return of 0.031%. The variance of the market return is 0.041%. The estimated risk free rate is 4% and the estimated market rate of return is 10%. The estimated required return on Hammond's s..
Ms. Manners Catering (MMC) has paid a constant $1.50 per share dividend to its common stockholders for the past 25 years. MMC expects the next dividend to increase at a constant rate equal to 7 percent per year into perpetuity. Investors require a 12..
How does the fact that the lessor and lessee have different borrowing rates affect the calculation of the NAL?
An enterprise recently reported an EBITDA of 8million and net income of 2.4 million, it had 2.0 million of interest expense, and corporate tax rate was 40%. What was it's charge for depreciation and amortization?
Why is a high risk premium an advantage for the investor? Why is a low risk premium an advantage for an investor?
What is the monthly break even point for the number of pints made and sold to the nearest integer? ________
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