Determine the price of the bond , Cost Accounting

Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7% (annual coupon payments) and a face value of $1000. Andrew believes it can get a rating of A from Standard and Poor's. However, due to recent financial difficulties at the company, Standard and Poor's is warning that it may downgrade Andrew Industries bonds to BBB. Yields on A-rated, long-term bonds are currently 6.5%, and yields on BBB-rated bonds are 6.9%.

a. What is the price of the bond if Andrew maintains the A rating for the bond issue?   

Posted Date: 3/23/2013 5:24:39 AM | Location : United States







Related Discussions:- Determine the price of the bond , Assignment Help, Ask Question on Determine the price of the bond , Get Answer, Expert's Help, Determine the price of the bond Discussions

Write discussion on Determine the price of the bond
Your posts are moderated
Related Questions
Standards and Budgets Budgets like you recall from the previous section, are simply plans for expected future performance expressed in quantified monetary terms. Therefore the

Eckels Wares is a division of a major corporation. The following data are for the latest year of operations: Sales

Direct material yield variance (MYV) :   It has been described by the ICMA, London, as 'the variation between the standard yield of the actual material input and the actual yi

Manufacturing Concern to Organization There are three manufacturing centres as Making, Packing and Finishing.  These are supported through five support departments, namely Mai


Determine Difference between Results Using Marginal Costing and Absorption Costing The overhead absorption rate for product X is Ksh.10 per machine hour. All unit of product X

distinguish between bin card and store ledgre

Presented here is the basic financial information from the 2009 annual reports of Intel and Advanced Micro Devces (AMD), the two primary manufacturers of silicon chips for personal

Assume the same facts as in 1A above, except that the interest payment checks were placed on the shareholders' office on December 31, 2012. However, the shareholders are not in the

How does idel capacity effect cost behavior patterns and factory overhead application methods