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Two years ago your corporate treasurer purchased for the firm a 20-year bond at its par value of $1,000. The coupon rate on this security is 8%. Interest payments are made to bondholders once a year. Currently, bonds of this particular risk class are yielding investors 9%. A cash shortage has forced you to instruct you to instruct your treasurer to liquidate the bond.
a. At what price will your bond be sold? Assume annual compounding.b. What will be the amount of your gain or loss over the original purchase price?c. What would be the amount of your gain or loss had the treasurer originally purchased a bond with a 4-year rather than a 20- year maturity?d. What do we call this type of risk assumed by your corporate treasurer?
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Identify and analyze the effect of the payment of interest and the amortization of premium on December 31,2014 (the third year), and determine the balance sheet presentation of the bonds on that date.
Fred Gowen opened Gowen Retail Sales as a sole proprietorship and recorded the following transactions during his 1st month in business:
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Consider an investor who purchased a stock at $100 per share. The current market price is $125. At what price would a limit order be placed to assure a profit of $30 per share?
On a typical day, Park Place Clinic writes $1,000 in checks. It generally takes four days for those checks to clear. Each day the clinic typically receives $1,000 in checks that take three days to clear. What is the clinics average net float?
Calculate breakeven point from the given below information? As percent of sales, determine its variable or contribution margin?
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What is the cost of preferred stock that pays a 12% dividend and sells at par if the firm's tax rate is 35%? Hint: assume preferred stock price is $1,000 and dividend is $120.
What does the historical record of interest rates and inflation in the United States look like? Explain in details with references to text book.
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