Assuming that corporate bond pays coupon

Assignment Help Financial Management
Reference no: EM131187999

Assuming that corporate bond pays coupon of 7% of par value of the bond. If par value/face value of the bond is $10,000, how much you would pay for this bond if your discount rate/required rate of return is equal to 8%

Reference no: EM131187999

Questions Cloud

Annual payments for this loan in both cases : A customer comes to you and asks to receive valuable advice supported with calculations on the purchase of a mini apartment. She/he has a choice to pay today entire old credit card debt in the amount of $80,000 that has annual interest rate of 3% and..
Financial planner you receive a call from the customer : As a financial planner you receive a call from the customer of your company who is planning to retire in year 2036. The person wants to withdraw from its account from 2036 until 2056 exactly $120,000 per year. How much money the person need to deposi..
How much you need to deposit in equal annual payments : Assume that you want to have $40,000 in your saving account in year 2026. If your account earns 5% annually and you deposit $7,000 today, calculate how much you need to deposit in equal annual payments in the each of the remaining years to achieve sa..
Elements of statement of cash flow : A cash flow statement indicates flow of cash into and out of a business organization. In most cases, an organization’s cash in hand is lower than operations, although both have to be equal and this is attributed by outstanding bills still not paid by..
Assuming that corporate bond pays coupon : Assuming that corporate bond pays coupon of 7% of par value of the bond. If par value/face value of the bond is $10,000, how much you would pay for this bond if your discount rate/required rate of return is equal to 8%
Difference between net income and cash flow : Using the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze their cash flows for 2008 and 2009. (in thousands) 2009 2008 Net income $ 316,354 $ 242,329 Noncash charges (credi..
Total amount of interest the person : A customer come to you and asks to receive valuable advice supported with calculations on the purchase of used car. Assuming the car costs $91,500 and would be fully financed from bank for 4 years and at interest of 7%, Total amount of interest the p..
How many shares are outstanding : The authorized share capital of the Alfred Cake Company is 120,000 shares. The equity is currently shown in the company's books as follows: How many shares are issued? How many shares are outstanding?
How much time to allocate in radio-television advertising : A brand manager for ColPal Products must determine how much time to allocate between radio and television advertising during the next month. Market research has provided estimates of the audience exposure for each minute of advertising in each medium..

Reviews

Write a Review

Financial Management Questions & Answers

  The dividend should grow rapidly

Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $0.50 coming 3 years from today. what is..

  What would be its price relative to the xy inc bond

If CD, Inc., has a bond with a 5.25% coupon and a maturity of 20 years but which was lower rated, what would be its price relative to the XY, Inc., bond? Explain.

  Which stock has the highest capital gains yield

Chapman Tech is expected to pay a$1.20 dividend at the end of the year. The required return on chapmans stock is 11% and its dividend is expected to grow at a constant rate of 7% per year. which stock has the highest dividend yield (DY)? which stock ..

  Determine the yield-to-maturity and bonds coupon rate

Two years ago, Trans-Atlantic Airlines sold $250 million worth of bonds at $1,000 each. These semi-annual bonds had a maturity of 12 years and a coupon rate of 12.5%. Today these bonds are selling for $1,000. Determine the yield-to-maturity. A semi-a..

  What is the value of this endowment in todays dollars

A wealthy philanthropist has established the following endowment for a hospital. The details are as follows: a cash deposit of $ 12 M two years from now; an annual cash deposit of $4M per year for the next five years. The first $4M will start today; ..

  Pledges to increase its dividend

Metroplex Corporation will pay a $3.80 per share dividend next year. The company pledges to increase its dividend by 3.0 percent per year indefinitely. If you require an 11.9 percent return on your investment, you will pay $___________ for the compan..

  Overview to make corporate finance decisions

Final Project Part III Part III Overview To make corporate finance decisions, take an advanced finance course, or pursue a career in finance, you will need to understand basic concepts. This includes going beyond the number crunching and reading grap..

  Why are mutual funds popular with individual investors

Darby Minerals wants to hire an investment banker to sell 2 million shares of stock to the public. Darby is considering using either a firm commitment or a best efforts offering. Why are mutual funds popular with individual investors?

  What are the risks in a fra if you are the buyer

What are the risks in a FRA if you are the buyer?

  Differences between the spot and forward exchange rates

Explain why the currency of Country A, whose interest rates are twice as great as those in Country B, must trade at a forward discount. If there were no differences between the spot and forward exchange rates in this interest rate environment, what a..

  What is the profitability index of project

Scrooge Inc. has two mutually exclusive projects available whose cash flows are: Year 0 1 2 3 4 5 Project A -20,000 12,000 8,000 6,000 4,000 2,000 Project B -20,000 9,000 6,000 6,000 8,000 6,000 The required rate of return is 14% What is the NPV of P..

  Coupon bond has face value-what is the yield-to-maturity

A 7.5 percent coupon bond has a face value of $1,000, pays interest semi-annually, has 8 years to maturity, and is currently selling for $996.34. What is the yield-to-maturity?

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