Bond issue outstanding-what would your investment yield

Assignment Help Financial Management
Reference no: EM131056238

Oklahoma Instruments has a bond issue outstanding that pays $70 annually. It has a face value of $1,000, and it will mature in eight years. Similar bonds are priced to yield 6.5%. What would you expect this bond to sell for? If you held this bond until it matures what would your investment yield?

Reference no: EM131056238

Questions Cloud

Find NPV for go now and for wait then discount the wait-NPV : Norris Production Company (NPC) is considering a project that has an up-front cost at t = 0 of $2,500. (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is a..
It and the business at modmeters : How capable is the association amongst IT and the business at ModMeters? Perceive the lacks of both IT and the business.
Produce a project initiation document for your employer : BCO3446PROJECT MANAGEMENT Assessment. This assessment task (25%) requires you to take on the role of an Information Systems Project Manager to produce a Project Initiation Document (PID) for your employer, Victoria University Information Systems C..
What is the return on the investment for the coming year : Assume you have a client who owns the Oklahoma Instruments bond. You expect that the interest rates decrease .5% over the coming year and you advise to sell the Oklahoma Instruments bond exactly one year from now. What will be the sale price and what..
Bond issue outstanding-what would your investment yield : Oklahoma Instruments has a bond issue outstanding that pays $70 annually. It has a face value of $1,000, and it will mature in eight years. Similar bonds are priced to yield 6.5%. What would you expect this bond to sell for? If you held this bond unt..
It and the business at modmeters : How capable is the association amongst IT and the business at ModMeters? Perceive the lacks of both IT and the business.
Price of the bonds increase between now and maturity : Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are trading at well below par value. He has his eye on a bond issued by the Leisure Time Corporation. What is the current price of the bonds? By what percent w..
Firm needs to plow back its earnings to fuel growth : Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $10 per share dividend 10 years from today ..
Explain reason and justification - sections of the corp act : RESEARCH than EXPLAIN the REASON and JUSTIFICATION for the following sections of the Corp Act :- SECTION 124; SECTION 129(1)

Reviews

Write a Review

Financial Management Questions & Answers

  What is the partial payment for the last month

Aquitaine Corporation has borrowed $1.35 million from a bank with the understanding that it will pay $60,000 a month, until the loan is paid off. The bank will charge 6% per annum interest on the unpaid balance, calculated monthly. How long will it t..

  Will ventura benefit more from exchange rate effects

Will Ventura benefit more from exchange rate effects if its parent provides equity financing for the subsidiary or if the subsidiary is financed by local banks in Japan? Explain.

  Used when evaluating the addition of the lower-priced shoes

Walks Softly sells customized shoes. Currently, it sells 16,000 pairs of shoes annually at an average price of $68 a pair. The company is considering adding a lower-priced line of shoes that will sell for $39 a pair. Walks Softly estimates it can sel..

  What is the duration of a two-year bond

What is the duration of a two-year bond that pays an annual coupon of 11.6 percent and has a current yield to maturity of 13.6 percent? Use $1,000 as the face value. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? U..

  What is the taxable equivalent yield

An investor in the 20% Marginal tax bracket is looking at buying Harrisburg, PA notes. The Yield is 4.25% on the notes. What is the Taxable Equivalent Yield?

  What must be the opportunity cost of capital

A stock sells for $60. The next dividend will be $3 per share. If the return on equity ROE is a constant 10% and the company reinvests 40% of earnings in the firm, what must be the opportunity cost of capital?

  Calculate the depreciation expense

You are given the following information for Gandolfino Pizza Co.: sales = $42,000; costs = $21,300; addition to retained earnings = $7,250; dividends paid = $1,200; interest expense = $5,300; tax rate = 35 percent. Calculate the depreciation expense.

  How do we define and measure risks in financial projects

How do we define and measure risks in financial projects? What are examples of uses for sensitivity analysis and what-if scenarios? Any examples from your work experience or research? How do we define fixed and variable costs?

  Designated the revocable beneficiary

John purchases a life insurance policy on the life of Mary. John is the owner, and Bill is designated the revocable beneficiary. Under these circumstances, which of the following statements is correct?

  Capital budgeting analysis on a project with estimated cost

Suppose you are running a capital budgeting analysis on a project with an estimated cost of $2 million. The project is considered similar to the existing lines of businesses for the company. Given the cash situation, the company will fund the project..

  Compare the two cases of owning the stock versus

We buy a put option of Stefanic and associates. Its premium is $1 and the strike price is $34. The current market price is $40. If the price drops to $20, shall we exercise the put option? If not, why not , and If yes, why yes? Compare the two cases ..

  What is the payback period of the ice cream cart

It will cost $4,100 to acquire a small ice cream cart. Cart sales are expected to be $3,300 a year for five years. After the five years, the cart is expected to be worthless as that is the expected remaining life of the cooling system. What is the pa..

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