Calculate and answer what the bond is worth

Assignment Help Financial Management
Reference no: EM13885234

1) A company issued a bond with the following conditions: Sales price = SEK 1000, strike price = 1100 SEK , coupon = 80 and the number of outstanding year for the bond is 10. Calculate and answer what the bond is worth.

2) You work as husradgivare at a bank. One of your clients wondering when he has saved up 60 000SEK to make a payment on her house. The client now has 10050SEK saved and expects to save an additional 5000SEK per year at the end of each year. The client is expected to earn 7.25 % annual interest on their savings. How long will it take before the client has saved up 60 000SEK? 

Reference no: EM13885234

Questions Cloud

How much must you invest today : Suppose you are committed to owning a $195,000 Ferrari. If you believe your mutual fund can achieve a 13 percent annual rate of return and you want to buy the car in 10 years on the day you turn 30, how much must you invest today?
How long will it be before you have enough to buy the car : You're trying to save to buy a new $204,000 Ferrari. You have $54,000 today that can be invested at your bank. The bank pays 6.2 percent annual interest on its accounts. How long will it be before you have enough to buy the car?
Developing drugs for neurological diseases : A young listed company developing drugs for neurological diseases. So far the company has not shown any sales due to the typically long lead times to produce medicines. The market now is on is volatile, its beta value = 2 , the access to capital is u..
Why the shareholders return requirements : Explain how and why the shareholders' return requirements are influenced by a company's unsystematic and systematic risks. How is the capital of the company and the value of the company if the central bank suddenly decides to sharply raise the policy..
Calculate and answer what the bond is worth : A company issued a bond with the following conditions: Sales price = SEK 1000, strike price = 1100 SEK , coupon = 80 and the number of outstanding year for the bond is 10. Calculate and answer what the bond is worth.
Investment on companys cost of capital is infinitely high : Suppose that a company must examine an investment today (1st January) costs 100 000 SEK. This investment would provide SEK 30 000 in cash to the company at the end of each year for the 5 coming years. Calculate and answer whether the company should i..
Does it take marios to sell its inventory : Mario's Home Systems has sales of $2,790, costs of goods sold of $2,130, inventory of $498, and accounts receivable of $427. How many days, on average, does it take Mario's to sell its inventory?
Strategy-cost and payoff of the options and total payoff : A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. The options are worth $11, $14, and $18. What is the maximum net gain (after the cost of the options is taken into account)?..
Total value of the warrants and the value of each warrant : A warrant is a long-term option from a company that gives the holder the right to buy a stated number of shares of the firm’s stock at a specified price for a specified length of time. What is the total value of the warrants and the value of each war..

Reviews

Write a Review

Financial Management Questions & Answers

  Same cost of equity and after tax cost of debt

Two companies have the same cost of equity and after tax cost of debt. What needs to be true regarding the cost of debt as compared to cost of equity for the WACC of the higher leverage firm to be higher than that of lower leverage firm? And why?

  Variable costing and absorption costing net operating income

Assume the company uses variable costing: Compute the unit product cost for year 1 and year 2. Assume the company uses absorption costing: Prepare an income statement for year 1 and year 2. Reconcile the difference between variable costing and absorp..

  Surrendering old equipment before the end of its useful life

When looking at these types of projects, one must consider any cash flows that arise from surrendering old equipment before the end of its useful life.

  Stock using the two-stage dividend discount model

You see a fast growing company that is estimated to have dividend growth of 24%, 20%, and 16% over each of the next three years (24% in year 1 in year 2 20% and in year 3 16%) The company paid a dividend of $2.28 per share over the past twelve months..

  Find problems inherent in simpsons wacc calculation

Find problems inherent in Simpsons WACC calculation and what can you suggest to solve problems found - Simpson used the CAPM to estimate the cost of common stock.

  About the unlevered beta

Counts accounting has a beta of 1.25. The tax rate is 35%, and Counts is financed with 45% debt. What is Counts' unlevered beta?

  Fast-growing company that expects to grow at rate

Fresno Corp. is a fast-growing company that expects to grow at a rate of 23 percent over the next two years and then to slow to a growth rate of 14 percent for the following three years. If the last dividend paid by the company was $2.15.

  What is the companys equity price to book ratio

The company share price in the stock market is $42. The equity book value per share according to the balance sheet is $56. There are 540 million shares outstanding. What is the company’s equity price to book ratio?

  Use the straight-line method to depreciate its asset to zero

Etonic Inc. is considering an investment of $373,000 in an asset with an economic life of 5 years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $253,000 and $78,000, respectively. Both rev..

  What would be the full economic price of this legislation

From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. What would be the f..

  Existing bond that annual coupon payments

Bond Valuation Assume the following information for an existing bond that provides annual coupon payments: What is the present value of the bond? If the required rate of return by investors were 14 percent instead of 11 percent, what would be the pre..

  What is the value of the stock today

Calculate the growth rate, the expected dividend yield, and the stock's expected total rate of return - What is the value of the stock today

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