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
A listed entity, had 3,000,000 $1 ordinary shares in issue, On 1 January 2009 CSA.CSA made a bonus issue of 1 for 3, On 1 May 2009. CSA issued 2,000,000 $1 ordinary shares for $3.2

Important Aspect Regarding to Service Cost Centres The basis selected should be one that is judged to be the mainly equitable way of sharing the service costs of department

The CFO of ABC Municipality has heard of activity based costing and wants to execute it in the municipality. Because ABC involves a number of changes to how service costs are deter

Cost Classification Bases Costs can be classified on either more or one of the given bases as: a) Are the costs dependent on the level of output as like variable or are the

Contract Costing Terminology Principles of profit income recognition in contracts The Notional Profit This is a component of two items as: a) Profit taken   = Noti

LIMITATIONS OF COST ACCOUNTING Cost Accounting similar to additional branches of accountancy is not an precise science although is an art which was developed throughout theorie

Direct Labour Rate Variance It is the difference among the actual direct labour rate and the standard direct labour rate for the total hours worked. Utilizing an equation,

Pecos Canyon Winery is a small vineyard/winery located in the Big Bend area of West Texas. The initial cabernet grape vines were planted in the spring of 2004 with the first wine p

As a potential investor, what is the problem with different countries having different accounting standards? As the president of a multinational company, what is the problem with

how to calculate total costing in weighted average method