What is the yield to maturity for bonds

Assignment Help Financial Management
Reference no: EM131015953

Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 19-year to maturity, carry a 13.29 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that these bonds would sell for $926.50 each. What is the yield to maturity for these bonds?

Reference no: EM131015953

Questions Cloud

Meaning for each of the five ratio categories : Describe the purpose and meaning for each of the five ratio categories. Who uses the information from each category? What constitutes a complete ratio analysis? Why is a complete analysis used over a few key ratios?
Process for preparing pro forma income statements : Describe the process for preparing pro forma income statements and balance sheets. How are these statement analyzed to make cogent evaluations?
Financial manager cope with fluctuations in the cash budget : Describe short-term cash planning and how the cash budget is put together. Why does the firm needs to have this information? How does the financial manager cope with fluctuations in the cash budget?
Markets efficiency is affected by the number of transactions : Do you think a market's efficiency is affected by the number of transactions that take place, the amount of time it takes to complete the transaction and the number of buyers and sellers present? How do these questions relate to the Primary and Secon..
What is the yield to maturity for bonds : Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 19-year to maturity, carry a 13.29 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that t..
Combinations of discount rates and times : Compute the present value of a $1,000 cash flow for the following combinations of discount rates and times:
What is the companys return on equity : Net profit magin = .053%. Equity Multiplier = 2.48. Total assets= $99 million. Sales=$159 million. What is the companys return on equity in % form.
Annual revenue-what is the present value of the savings : Your company will generate $63,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 7.50 percent, what is the present value of the savings?
Is this growth rate sustainable : In the TV episode Tim mentions that Grease Monkey Wipes have been on the market for a few months and they have sold 7,600 units with gross revenue is $7,400. In the update video Erin mentions that Grease Monkey Wipe has sold over 200,000 units and th..

Reviews

Write a Review

Financial Management Questions & Answers

  How many years will you be able to retire

Suppose you put $ 525 a month for retirement into an annuity earning 7.75% compounded monthly. If you need $ 700000 to retire, in how many years will you be able to retire?

  Yield to maturity remains at its current rate

A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 5 years from now?

  Net operating working capital behavior

Short term financial management - Read the article - Net Operating Working Capital Behavior: A First Look.

  Remaining life and current values of the bonds

The older bonds have a face value of $100,000 each and pay 18% in semi-annual instalments. They have an early call provision for a 5% premium over face value. The bonds were sold 8 years ago and have a 12-year term.

  Dollar amount of your profit or loss from buying call option

The U.S. three-month interest rate (annualized) is 2%. The British pound three-month interest rate (annualized) is 3.5%. Assume interest rate parity exists. The expected inflation over this period is 6% in the U.S. and 2% in England. Determine the do..

  What is the stocks theoretical forward price for delivery

The current price of a stock is $400 per share and it pays no dividends. Assuming a constant interest rate of 8% per year compounded quarterly, what is the stock's theoretical forward price for delivery in 9 months?

  What is your best estimate of the aftertax cost of debt

Jiminy’s Cricket Farm issued a 20-year, 6 percent semiannual bond 2 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 40 percent. What is the company’s total book value of debt? What is your best estimate..

  Explain the target costing diagnostic tool developed

Explain the Target Costing Diagnostic Tool developed by CAM-I, and discuss some possible applications of the Tool to business and/or non-business organizations

  Compute its fair market value

A stocks next 2 dividends are as follows: $0.25 and $1.00. After that, the stock is expected to grow at a rate of 4% indefinitely. The required return on this stock is 16%. Compute its fair market value.

  Classified as charitable remainder unit rust

Which of the following factors is the critical or deciding characteristic that indicates that a trust should be classified as a charitable remainder unit rust, rather than a charitable remainder annuity trust? Which of the following statements concer..

  What is the required rate of return on preferred stock

Analogue Technology has preferred stock outstanding that pays a $9 annual dividend. It has a price of $76. What is the required rate of return (yield) on the preferred stock?

  Risk-free rate have to be for the two stocks

Stock Y has a beta of .98 and an expected return of 10.30 percent. Stock Z has a beta of .80 and an expected return of 9 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

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