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With a Series EE bond, you pay a particular amount today of, say, $25, and the bond accrues interest over the time you hold it. In early 2012, the U.S. Treasury promised to pay .60 percent per year on EE savings bonds. In an interesting (and important) wrinkle, if you hold the bond for 20 years, the Treasury promises to “step up” the value to double your cost. That is, if the $25 bond you purchased and all the accumulated interest earned is worth less than $50, the Treasury will automatically increase the value of the bond to $50.
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In 2022, instead of cashing the bond in for its then current value, you decide to hold the bond until it doubles in face value in 2032. What rate of return will you earn over the last 10 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
AMG Inc. had the following balances in its shareholders' equity at the beginning of the current year: Prepare the journal entries to record the transactions. Determine the number of shares outstanding. Prepare the Shareholder’s Equity section of the ..
DDD uses constant 12% WACC as discount rate while evaluating all its domestic projects. What do you foresee happening with its WACC in the next five years?
Your firm is contemplating the purchase of a new $540,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $52,000 at the end of that time. You will save $300,000 before..
A bond with a face value of $18,000 and a 2.7?% interest rate? (compounded semiannually?) will mature in 9 years. What is a fair price to pay for the bond ?today? A fair price to buy the bond at would be $____
For each of the following situations, assuming fixed exchange rates, tell what will happen to the balance of payments on current and capital accounts in the United States, ceteris paribus:
An investor believes that there will be a big jump in a stock price, but is uncertain as to the direction. - Identify six different strategies the investor can follow and explain the differences among them.
You bought one of Great White Shark Repellant Cos 6.6 percent coupon bonds one year ago for $1,056. These bonds make annual payments and mature 11 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 4..
Consider a financial model with two trading times {0,1}, a single stock S that pays no dividents, and a bank. At t=0, we can buy or sell any number of shares of the stock at the price S0 = $40 per share. at t=1 the value of one share of stock will be..
You just purchased a bond that matures in 4 years. The bond has a face value of $1,000 and has an 9% annual coupon. The bond has a current yield of 7.63%. What is the bond's yield to maturity?
Waterway Brothers has the following data for the year ending 12/31/07: Net income = $600; Net operating profit after taxes (NOPAT) = $700; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Tot..
Time value of money calculations may not be required in an economic evaluation for all of the following reasons except:
What factors contribute to an expansion of the commercial paper market and what factors cause a contraction in the commercial paper market?
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