Calculate the current price of bond-current yield of bond

Assignment Help Financial Management
Reference no: EM131329470

You are considering purchasing a General Electronic bond that has a compound rate of 6 %, per value of 1000 & a maturity of 25 yrs. The bond is callable for 10 yrs & if the bond is called you will be paid a premium of &100 over pay. The yield to maturity bond is 9 %. Calculate the current price of the bond, current yield of the bond, the yield to call of the bond.

Reference no: EM131329470

Questions Cloud

Three important differences between GAAP and IFRS : Be able to explain why the possible failure of Citi Group was so important to governments and corporations in 2008. Be able to discuss at least three important differences between GAAP & IFRS. Discuss the benefits and challenges for US based MNC’s of..
Evaluate bank solvency and banking system safety : Why do US multinational corporations hold $trillions of retained earnings in their foreign subsidiaries? Are taxes the only (or the primary) reason for the decision to not repatriate those retained earnings? Be able to describe the tools available to..
Asset structure balance sheet structure capital structure : Discuss the different ways these statements are used each please: Asset Structure Balance Sheet Structure Capital Structure Liquidity Structure Financial Indicators Positively Influence Profitability and Why?
What is return shareholders are expecting : Paychex Inc. (PAYX) recently paid an $0.86 dividend. The dividend is expected to grow at a 10 percent rate. The current stock price is $54.51. What is the return shareholders are expecting?
Calculate the current price of bond-current yield of bond : You are considering purchasing a General Electronic bond that has a compound rate of 6 %, per value of 1000 & a maturity of 25 yrs. The bond is callable for 10 yrs & if the bond is called you will be paid a premium of &100 over pay. The yield to matu..
What is net present value of this project : You can invest in a stream of cash flows that requires a $25,000 investment today + promises to pay 5000 for the next 3 yrs + 8000 for the subsequent 3 yrs. If you have a cost of capital of 3% what is the net present value of this project?
What is the estimated cost of the replacement : The construction equipment that Armstrong Inc. purchased in 2008 for $M must be replaced in 2012. What is the estimated cost of the replacement? SmartBook Inc. calculates the shipping cost for online orders as follows: a flat fee of $P for each order..
Determine which type of storage space should be used : A manufacturing company is in need of 1000 square meters of storage space for 3 years. The company is considering the purchase of land for $8 000 and erecting a temporary metal structure on it at a cost of $70 per square meter. Using Present Worth An..
Standard deviation of return on client portfolio : You manage an equity fund with an expected risk premium of 14% and a standard deviation of 54%. The rate on Treasury bills is 6.8%. Your client chooses to invest $120,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund...

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate laurie total life insurance requirements

Katie Holt is a 72-year-old widow who has recently been diagnosed with Alzheimer's disease. She has limited financial assets of her own and has been living with her daughter Laurie for 2 years. Her only income is $700 a month in Social Security survi..

  Common stockholders expect greater returns

Common stockholders expect greater returns than bondholders because: An decrease in the ________ will increase the value of preferred stock. Changes in the general economy, such as changes in interest rates or tax laws, represent what type of risk?

  Quantifications is element of the economic environment

Sprouse and Moonitz proposed that quantifications is an element of the economic environment that is relevant for accounting. explain why sprouse and Moonitz say that quantification is relevant. discuss how the sprouse and moonitz discussion of quanti..

  What will be the net present value

Christina hopes to open a Deli in 2015. The initial investment will be $85,000. She expects that that the Deli will generate the positive cash flow as indicated below. If she can borrow money at 7% per year, what will be the Net Present Value? Use 7%..

  Security beta expected return-what is the risk-free rate

Suppose you observe the following situation: Security Beta Expected Return Peat Co. 1.20 11.2 Re-Peat Co. 1.00 9.6 Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate?

  Discuss the offer of preferred shares

The company Maximum All-Stars, Inc. like to discuss the offer of preferred shares of the company West Coast International. The company plans to issue 15% of preferred shares to sell at par value of $ 63 per share. Costs incurred in this issue (flotat..

  Use the weighted average cost of capital

Calliope Company is considering an investment of $60 million in plant and machinery. The property and machinery will be depreciated to a zero book value based on MACRS. It is in the 3-year property class. The firm has a 4-year planning horizon. Calli..

  Liquidate their holdings in closed-end fund

Investors who wish to liquidate their holdings in a closed-end fund may ___________________.

  Risk-averse investors reject investments that are fair games

Risk-averse investors reject investments that are fair games. Risk-neutral investors judge risky investments only by the expected returns. Risk-averse investors judge investments only by their riskiness. Risk-loving investors will not engage in fair ..

  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..

  Explain why income taxes distort labour and capital markets

Many people argue that a consumption tax is preferable to an income tax, because while income taxes distort both labour and capital markets, consumption taxes only distort labour markets. Explain why income taxes distort labour and capital markets. E..

  Net operating income and net selling price model

A small shopping center is expected to produce net operating income of $23,880 in year 1. You expect NOI to increase by 4 percent per year over an expected holding period of seven years. Property value is expected to increase by 3 percent per year. T..

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