Valuation a d rates of return, Finance Basics

You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 13 percent, which is paid semiannually. The yield to maturity on the bonds is 10 percent annual interest. There are 25 years to maturity.

a. Compute the price of the bonds based on semiannual analysis.
b. With 20 years to maturity, if yield to maturity goes down substantially to
8 percent, what will be the new price of the bonds?
Posted Date: 2/7/2013 4:06:07 PM | Location : United States







Related Discussions:- Valuation a d rates of return, Assignment Help, Ask Question on Valuation a d rates of return, Get Answer, Expert's Help, Valuation a d rates of return Discussions

Write discussion on Valuation a d rates of return
Your posts are moderated
Related Questions
Question 1: (a) (i) What are Asset shares? (ii) State the purpose of calculating Asset shares. (b) Outline the five uses of policy Asset shares? (c) Lif

Example of Valuation of Bonds and Debentures K is contemplating purchasing a 3 year bond worth 40,000/= carrying a nominal coupon rate of interest of 10 percent.  K necessary

Stone Container is a major producer of cardboard boxes. Stone Container has $10M in outstanding equity. In addition, it has $2M in outstanding debt. The debt is a ten-yearmortgage

Asset Based Valuation  This method acquires into account the entire business along with reference to its assets and then divides the resultant value via the number of shares i


Basic EOQ Model The basic inventory decision model is Economic Order Quantity or called EOQ model. This model is specified via the following equation as: Whereas:Q is

the two problems below (P1 and P2). Five marks each. Part marks will be allocated, but if you have the incorrect answer then you cannot expect to get more than half marks. Project

Comments : The approved budget for 1997, reduced government spending in housing and urban development, health and human service, and education. Ignoring any other modifications, ho

• Company X has $100,000 face value of outstanding bonds consisting of 100 $1,000 face value bonds with a 4% annual coupon and 20 years remaining until maturity. The bonds are cur

Advantages of Central Depository System or CDS 1. It shortens the registration procedure in the stock exchange that is high speed of registering shareholders. 2. It improve