Bonds discount rate is lowered

Assignment Help Financial Management
Reference no: EM13721923

Which one of the following will occur if a bond's discount rate is lowered?

a. coupon rate will decrease

b. market price will increase

c. current yield will increase

d. coupon payment amount will decrease

e. call premium will increase.

Reference no: EM13721923

Questions Cloud

What is the projects discounted payback period : A project has an initial cost of $925, expected net cash inflows of $690.30 per year for 4 years, and a cost of capital of 11.10%. What is the project's discounted payback period?
What is the projects payback period : A project has an initial cost of $41,600.00, expected net cash inflows of $9,000.00 per year for 12 years, and a cost of capital of 12.50%. What is the project's payback period?
Collaboration in a business environment is a best practice : Collaboration in a business environment is a best practice that leverages the collective knowledge of the team assembled. Peer evaluation and support, provided in the spirit of continuous improvement and organizational success, result in higher qu..
What are the yields to maturity for bond : Consider three risk free Eurobonds (which pay coupons annually). Their times to maturity, coupon rates and current market prices (based on a face value of$100) are as follows: Bond A 1 yr 9% $101.25; Bond B 2 yrs 8% 99.75; Bond C 3 yrs 7% $96.00.
Bonds discount rate is lowered : Which one of the following will occur if a bond's discount rate is lowered?
Standard employment applications : The following information is sometimes requested on standard employment applications, though job candidates might consider some of it to be private or personal.
Calculate the equivalent annual cost of the facility : An oil company has installed an offshore production facility for $10 million. The annual maintenance cost of the facility is $60,000 per year for the first year, increasing by $10,000 per year for the next 9 years. In the 11th year, a major overhaul ..
Calculate the equivalent annual value of these revenues : An engineer has generated an oil production forecast for a group of wells. According to this forecast, the wells produce 30,000 barrels in the first year. Starting the second year, production declines by 2,000 barrels per year for 4 years. Starting t..
Benefits of the family medical and leave act : Explain in complete detail the benefits of the Family Medical and Leave Act - date it was passed, it major components and its importance to employees and familiies

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare a cash-flow budget and a profit budget

Prepare a cash-flow budget and a profit budget for Gringotts Ltd on the basis of Strategy 1. The budgets should be split into quarterly intervals showing cash-flow and profit forecasts for each individual quarter.

  Decide to open an individual retirement account

You decide to open an individual retirement account (IRA) at your local bank that pays 11%/year/year. At the end of each of the next 40 years, you will deposit $4,000 per year into the account (40 total deposits). 3 years after the last deposit, you ..

  International finance areas

The paper should integrate 4-6 citations and will be evaluated on adherence to the international finance areas, such as the clarity, efficiency, and effectiveness of communication, the appropriate use of financial terms, the level of thought commu..

  Why would an analyst use the modified du pont system to

Why would an analyst use the Modified Du Pont system to calculate ROE when ROE may be calculated more simply? Explain

  Round lot of francesca industries stock

Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is selling at $20 a share. The broker charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sal..

  You are a data analyst with john and sons company the

you are a data analyst with john and sons company. the company has a large number of manufacturing plants in the united

  Currency forward market and a futures market

Explain the basic differences between the operation of a currency forward market and a futures market and calculate the intrinsic value and the time value of the call and the put option.

  Calculate the two projects npvs

Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $220,000, a 3-year expected life, and after-tax cash flows (labor savings and depre..

  Analysis of the financial statements

Analysis of the financial statements and provide a recommendation as to whether XYZ should invest or not invest in this company.

  How to get the holding period return for a 980 selling

how to get the holding period return for a 980 selling security that purchased fiver years before at 798?prove that

  What should be the yield to maturity on risk-free bonds

The rate of inflation for the next twelve months (Year 1) is expected to be 1.4%; it is expected to be 1.8% the following year (Year Two); and it is expected to be 2.0% every year after Year Two. Assume the real risk-free rate, r*, is 3 percent for a..

  What will be the expected return on the firms stock

Buckeye Corp. is currently an all-equity firm with a market value of equity of $100 million. The current expected return on Buckeye''s equity is 25%. Buckeye operates in a world with no taxes.

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