Assume that the yield to maturity remains constant

Assignment Help Financial Management
Reference no: EM13767950

A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095.

a) What is its yield to maturity (YTM)? Round your answer to two decimal places.

b) Assume that the yield to maturity remains constant for the next 4 years. What will the price be 4 years from today? Round your answer to the nearest cent.

Reference no: EM13767950

Questions Cloud

What is the size of the quality spread differential : Firm A and Firm B need to raise $100,000,000 of debt to pay for their projected capital expenditures. Firm A is a blue chip company with a high credit rating in the corporate debt market. It can borrow funds at either 10.75% fixed rate or at LIBOR + ..
Do you think socrates was an atheist : Do you think Socrates was an atheist, as he was charged in court? Why or why not? What is wrong with atheism anyway? Socrates gives several arguments about death not being something that he fears.
Pharmacological companies problem issues : Why don't they want to spend money on making sick people well?
How long did it take for the car to stop from the moment : The following data shows the position (x), the speed (v), and the deceleration (v2) of a car from the moment that driver hit the break until the moment that the car came to a stop. Required: Please utilize an Excel spreadsheet to find the trend of de..
Assume that the yield to maturity remains constant : A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095. What is its yield to maturity (YTM)? Assume that the yield to maturity remains constant for the next 4 years. What will the price be 4 years from today? ..
Summary of the jurisdiction : A summary of the jurisdiction (i.e., city, county, or state) and the portion of the criminal justice system your proposal is designed to address
Annual dividend divided by the current stock price : Next year's annual dividend divided by the current stock price is called the:
Discuss how the philosophy of economist milton friedman : Discuss the legal and ethical issues surrounding Solyndra, the California based solar panel manufacturer. You will need to research the company through the University library.
Expected return on the market : Security I has a beta of 1.3, the risk-free rate is 4%, and the expected return on the market is 11%. What is the expected return for Security I?

Reviews

Write a Review

Financial Management Questions & Answers

  Define the value of a firm might change

Describe how, in principles, the value of a firm might change as its leverage increases. Discuss why, in practice, firms might choose high levels of debt.

  The split has no effect on the total market value

JPix management is considering a stock split. JPix currently sells for $65 per share, and a 3-for-2 stock split is contemplated. What will be the company's stock price following the stock split assuming that the split has no effect on the total marke..

  Considering investing in either of two aaa corporate bonds

Suppose you are considering investing in either of two AAA corporate bonds. One will provide you with an annual 8% coupon payment, while the other only pay's a 6% coupon.  Assume current yields for AAA bonds are 7%. Explain why your yield to maturity..

  The investors geometric average return

An investor bought stock in a company for $10,000. Five years later, the investment (including reinvested dividends) was worth $8,000. The investor's geometric average return was:

  What is swimkidss margin of safety

Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $71,100. Swimkids expects sales of $288,700 next year. What is Swimkids's margin of safety?

  Explain where in the consolidated financial statements

Explain where in the consolidated Financial Statements of Group X would you find evidence of a S i Non Controlling Interest (NCI) using AASB - provide the relevant paragraphs of the AASB Standards for all of the following requirements:

  Advantages of the international trade agreement

Summarized the advantages of the international trade agreement selected and summarized the disadvantages of the international trade agreement selected.

  Accounting of managerial decision from books of aggarwal

from books of aggarwal bors following information has been extracted rs. sales 240000 variable costs 144000 fixed costs

  What is the amount of the firms ebit

Advantage First Corporation has sales of $4,466,950: income tax of $396,030; the selling, general, and administrative expenses of $283,516; depreciation of $342,761; cost of goods sold of $2,682,040; interest expense of $190,074. What is the amount o..

  Setup cost for the production process

The Handy Manufacturing Company manufactures small air conditioner compressors. The estimated demand for the year is 15,000 units. The setup cost for the production process is $250 per run, and the carrying cost is $10.00 per unit per year. The daily..

  What would be the total return of the bond in dollars

A 6.60 percent coupon bond with 15 years left to maturity is priced to offer a 5.3 percent yield to maturity. You believe that in one year, the yield to maturity will be 6.0 percent. What would be the total return of the bond in dollars? What would b..

  What is the yield to maturity on the bonds

Tom is considering the purchase of Red Lobster Inc. bonds that were issued 4 years ago. When the bonds were originally sold, they had a 25-year maturity and a 6.54% coupon interest rate paid annually. What is the yield to maturity on the bonds if you..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd