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1. Toby Imports issued 17 year bonds 2 years ago at a coupon rate of 10.3 percent. The bonds make semiannual payments. These bonds currently sell for 102 percent of par value. What is the yield? 2. Keyser Materials has 8 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 102 percent of par. What is the current yield on Keyser Materials bonds? The YTM? The effective annual yield. 3. Jason Greg is a recent retiree who is interested in investing some of his savings in corporate bonds. Listed below is the bond he is considering adding to his portfolio. Bond B has a 10% semiannual coupon, matures in 12 years, and has a $1000 face value. Bond has a YTM of 10% a. Before calculating the prices of the bonds, indicate whether each bond is trading at a premium, discount of par. b. Calculae the price of each of this bond. c. Calculate the current yield for each bond. d. If the yield to maturity for the bond remains at 9%, what will be the price of the bond 1 year from now? 4. Price each bond and explain how the number of years to maturity and the coupon rate affect the current price of bonds. Assume YTM of 7%. 1. A 4-year bond with a 9% annual coupon 2. A 4-year bond with a zero coupon
Cambridge Prep Shops, a national clothing chain, had sales of $200 million last year. The business has a steady net profit margin of 12% and a dividend payout ratio of 40%.
Explain the current economic and financial condition we are facing today. How will the current economic and financial condition impact future growth of businesses?
What is the present value of these cash flows?
The company is considering two alternatives to raise the $2 million: (1) sell common stock at $10 per share, or (2) Sell bonds at a 10 percent coupon, each $1,000 bond carrying 50 warrants to buy common stock at $15 per share.
Assuming net fixed assets increased by $20,550 during the year, what was the addition to NWC? (Do not include the dollar sign ($).) Addition to net working capital
Discuss the reasons why corporations invest in securities. Discuss how the market would be affected if they stopped this practice? Compare and contrast the valuation guidelines for investment at a balance sheet date.
Explain What is the cost of financing and WACC and what is the after-tax cost of debt financing
Toyota has decided to offer new preferred stock for sale that it will call an 8-8 offering. This stock will pay an yearly dividend of $8 a share starting eight years from now.
The current price of a stock is $20 . In 1 year, the price will be either $26 or $16. The annual risk -free rate is 5%. Find the price of a call option on the stock that has a strike price of $21 and that expires in 1 year. (Hint: Use daily compou..
What are the key elements of business valuations and how would you value Walmart?
What is the maximum price that the company should be willing to pay for the new fleet of cars if it remains an all-equity company? (Do not include the pound sign (£).)
A firm paid a $3.00 dividend last year and dividends are expected to grow at 15% for the next 5 years and 5% thereafter. If the required return is 13%, what is the value of a share of stock?
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