Calculate the current price of the bond

Assignment Help Financial Management
Reference no: EM13812333

Davidson Corp has a $1000 par value bond outstanding paying annual interest of 6.5%. The bond matures in 25 years. If the present yield to maturity for this bond is 10%, calculate the current price of the bond. List i and n in your solution.

Reference no: EM13812333

Questions Cloud

Current cost of common equity : Annieco's last dividend was $1.50 and is expected to grow at a 10% rate per year. The current stock price is $48. What is the current cost of common equity for this company?
Calculate cost of debt-cost of new common stock : Vosberg, Inc wants to calculate the component costs in its capital structure. Common stock currently sells for $33, and is expected to pay a dividend of $.40. Vosberg's dividend growth rate is 8%, and flotation cost is $1.25. Calculate cost of debt, ..
Invest per year to meet his goal-cruise around with top down : Aaron Knape Plans on buying a '64 Chevy Impala low rider for $60,000 in 8 years and thinks he can get 5% annually from his investments. How much should he invest per year to meet his goal and cruise around with the top down?
What price would investors expect to pay for the bond : A $1,000 bond is issued paying 8% interest semi-annually for 15 years while the market is paying 7% for similar bond issues. What price would investors expect to pay for the bond?
Calculate the current price of the bond : Davidson Corp has a $1000 par value bond outstanding paying annual interest of 6.5%. The bond matures in 25 years. If the present yield to maturity for this bond is 10%, calculate the current price of the bond. List i and n in your solution.
Describe the market risk premium and risk-free rate : Please describe the market risk premium, risk-free rate and define beta as they relate to investor and creditor decision making. Please provide your estimation of the current risk-free rate and the source you used to support your estimation. You shou..
Merger valuation : Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 3% and the market risk premium is 8%. What is the per-share value of Van Buren to Harrison Corporation?
What is the pre-tax cost of debt for the newly-issued bonds : Crandal Dockworks is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 9% annual coupon bonds. The market price of the bonds is $1,070 each. Crandal's flotation expense on the new bonds will be $50 per b..
How is the internal rate of return of a project calculated : How is the internal rate of return of a project calculated, and what must be considered when using the internal rate of return rule? How should the cash flows of a proposed new project be calculated?

Reviews

Write a Review

Financial Management Questions & Answers

  What will be the percentage change in the bond price

A bond has a Macaulay duration of 6.25 years. What will be the percentage change in the bond price if the yield to maturity increases from 6 percent to 6.4 percent?

  Firm has issued cumulative preferred stock

A firm has issued cumulative preferred stock with a $50 par value and a 8 percent annual dividend. For the past two years, the board of directors has decided not to pay a dividend. The preferred stockholders must be paid ________ prior to paying the ..

  Question 1 the primary financial objective of corporation

question 1 the primary financial objective of corporation is usually taken to be the maximization of shareholder

  Problem 1what pairing of options would come closest to

problem 1what pairing of options would come closest to achieving the same risk management attributes of a eurusd six

  What is the companys current stock price

The XYZ Company just paid a dividend of D0 = $1.50 per share, and that dividend is expected to grow at a constant rate of 5.00% for the first 2 years and then 2% per year from year 3 till forever. The company's beta is 1.1, the expected market return..

  Financial analysis for managers

ou will also be expected to carry out horizontal analysis on the Income Statement using (2010 as base) and vertical common size analysis on the Statement of Financial Position (Balance Sheet) for 2 year.

  1 eleanor needs 40000 a year to live on in retirement net

1. eleanor needs 40000 a year to live on in retirement net of the income she will receive. she will be retiring in 22

  Higher rate of return from stocks with variable return rate

In 350-400 words explain why investors expect a higher rate of return from stocks with a variable return rate. Include once source reference.

  Geithner amp bernanke amid the global financial crisis1

geithner amp bernanke amid the global financial crisis1. from the breadth and depth of the economic downturn it was

  What is its self-supporting growth rate

Maggie's Muffins, Inc., generated $2,000,000 in sales during 2013, and its year-end total assets were $1,200,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..

  Organizational financials

For this piece of your project, create operational and financial components for the strategic planning process for NURSING HOMES. Consider both your internal and external analyses, but focus on your selected organization's strengths and weaknesses. T..

  Investors full profit per share on the option contract

Suppose a call option has an exercise price of $35, and the underlying stock is trading for $30. The cost of the option is $2, and the option expires in one month. A month later, the option stock is trading for $41. Assuming the investor exercises th..

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