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Barnes Enterprises has bonds on the market making annual payments, with 14 years to maturity, a par value of $1,000, and a price of $972. At this price, the bonds yield 8.4 percent.
What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Coupon rate %
An investment project provides cash inflows of $1,125 per year for eight years. What is the project payback period if the initial cost is $3,800? Payback period years Requirement : What is the project payback period if the initial cost is $4,850?
Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .092, E(RB) = .152, σA = .362, and σB = .622. a-1. Calculate the standard deviation of a portfolio that is composed of 37 percent A and 63 percent B when the correlati..
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Calculate the value of a 6-month European call futures option when the futures price is $21, the strike price is $20, the risk-free rate is 12% per annum and the volatility of the futures price is 20% per annum.
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Dan is going to buy a 19 year bond that pays a coupon rate of 11.56% per year and has a $1,000 par value. The bond currently priced at $1,326.92. What is the yield to maturity of this bond? Assume annual coupon payments. Round the answer to two decim..
Suppose that you buy a semi-annual coupon bond with coupon rate of 10%; the market price of $1,120, and the time to maturity of 17 years. Seven years from now, the YTM on your bond is expected to decline by 2%, and you plan to sell. What is the holdi..
The M Company has an EBIT of $250,000 that is constant over time and a corporate tax rate of 35%. Company M uses $5,500,000 of debt financing. If M used no debt, its cost of equity would be 12%. According to the Modigliani Miller theory with corporat..
Big Dom’s Pawn Shop charges an interest rate of 27.6 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What is the effective annual rate?
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What are the primary purposes of the Bankruptcy Code? Describe the creditor actions that are automatically held in abeyance when the debtor files a bankruptcy petition. When is a debtor allowed to void liens on his properties? What type of liens can..
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