User Account

All Pages

What is the value of a bond that has a par value

Assignment Help Financial Management
Reference no: EM131020862

1. What is the value of a bond that has a par value of $1,000, a coupon rate of 17.24 percent (paid annually), and that matures in 8 years? Assume a required rate of return on this bond is 13.53 percent.

2. General Mills has a $1,000 par value, 12-year bond outstanding with an annual coupon rate of 3.60 percent per year, paid semiannually. Market interest rates on similar bonds are 12.70 percent. Calculate the bond’s price today.

3. Black Water Corp. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 25 years and a yield to maturity of 8.29 percent, compounded semi- annually. What is the current price of the bond?

4. What is the yield to maturity of a 23-year bond that pays a coupon rate of 8.25% per year, has a $1,000 par value, and is currently priced at $1,298.05? Assume semi-annual coupon payments. Round the answer to two decimal places in percentage form

Reference no: EM131020862

Questions Cloud

Define social media monitoring : ECOM-322 -Social Media Marketing - Define social media monitoring. Discuss how an organization can track, measure, and evaluate its social media initiatives.
Current status of government securities in a short paper : Learn more about government issued T-bills and munis. Would you invest in government issued T-bills? Why or why not? Are there specific munis you would or would not invest in? What factors affect your choices? Write your analysis of the current statu..
What is the net present value of the project : ModMill has just announced that the firm will finance the purchase using equity. What is the new price per share of the firm's stock? How many shares will ModMill need to issue in order to finance the purchase?
Assume a standard mortgage with monthly payments : What is the required monthly payment on a $650,000.00 mortgage. Assume a standard mortgage (360 months) with monthly payments. Use a nominal rate (monthly compounding) of 6.30%.
What is the value of a bond that has a par value : What is the value of a bond that has a par value of $1,000, a coupon rate of 17.24 percent (paid annually), and that matures in 8 years? Assume a required rate of return on this bond is 13.53 percent. General Mills has a $1,000 par value, 12-year bon..
Determine the amount of goodwill impairment loss : If an impairment loss is required, prepare the journal entry to record the loss. (If no entry is required for an event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered ..
Coupon bonds on the market-what is the current bond price : Lycan, Inc., has 8.6 percent coupon bonds on the market that have 9 years left to maturity. The bonds make annual payments. Required: If the YTM on these bonds is 10.6 percent, what is the current bond price?
Discuss how certain features of bonds : Discuss how certain features (characteristics) of bonds affect their risk and hence return. Also discuss the usefulness and limitations of bonds ratings. How would these factors change your investment strategy when looking at bonds?
Calculate the project and equity free cash flows : Calculate the Project and Equity Free Cash Flows for the following scenario. We want to finance a project with 30% debt (70% equity). We expect $1,000,000 in sales for next year; Hint: to determine the EFCF, you will need to determine the value of th..

Reviews

Write a Review

Financial Management Questions & Answers

  Assume the beginning of the eight year for payment purposes

You are trying to figure out how you can pay for your two children’s college education. The older one will start college in 8 years (assume the beginning of the eight year for payment purposes) and the younger on in 10 years. You estimate that the ol..

  What is the payback period for each project

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 347,000 –$ 49,500 1 48,000 24,300 2 68,000 22,300 3 68,000 19,800 4 443,000 14,900 which ever project you choose, if any, you require a 15 percent return on..

  Most important determinant of meeting retirement goals

Most state lotteries in the U.S. give Lottery winners of particularly large prizes the option of taking the total prize as an annuity over several years, usually 10-20, or as a discounted lump sum now. What does this relationship suggest to potential..

  What is the current total value

Beach & Company reported net income of $40 million for last year. Depreciation expense totaled $18 million and capital expenditures came to $8 million. Free cash flow is expected to grow at a rate of 5% for the foreseeable future. What is the current..

  What is the bonds current market price

BOND VALUATION Callaghan Motors' bonds have 13 years remaining to maturity. Interest is paid semi annually, they have a $1,000 par value, the coupon interest rate is 5%, and the yield to maturity is 6%. What is the bond's current market price?

  According to the efficient markets hypothesis

According to the efficient markets hypothesis, professional investors will earn: excess profits over the long-term. a dollar return equal to the value paid for an investment. excess profits, but only on short-term investments. a return that "beats th..

  What is the discounted payback period for this investment

Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value..

  Standard deviation of crash-n-burn’s returns over period

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 20 percent, –12 percent, 17 percent, 20 percent, and 10 percent. a. What was the arithmetic average return on Crash-n-Burn’s stock over this five-year pe..

  Annual interest rate on fixed rate

If the spot rate for Euro is .81 Euro is equal to 1 US $, and the annual interest rate on fixed rate one-year deposits of Euro is 2.5% and for US$ is 1.5%, what is the nine-month forward rate for one Euro in terms of dollars? Assuming the same intere..

  Compute the discounted payback statistic for project

Compute the Discounted Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 13 percent and the maximum allowable discounted payback is..

  Maturity quoted at discount yield

What is the price of a U.S. Treasury bill with 56 days to maturity quoted at a discount yield of 1.20 percent? Assume a $1 million face value. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

  The prices and other information of two stocks in market

The prices and other information of two stocks in the market are listed in the table: Stock BHP: Price at year beginning ($50) Forecasted price at year end ($52) Forecasted dividend in the year ($3) Variance of returns (9%) Stock CBA: Price at year b..

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