Calculate the yield to maturity of these bonds today

Assignment Help Finance Basics
Reference no: EM13271202

Five years ago your firm issued a $1,000 par, 20-year bonds with a 6% coupon rate and an 8% call premium. The price of these bonds now is $1103.80. Assume annual compounding.

1) Calculate the yield to maturity of these bonds today.

2) If these bonds are now called, what is the actual yield to call for the investors who originally purchased them?

 

Reference no: EM13271202

Questions Cloud

What are the companys debt-to-equity ratio : Conseco, Inc., has a debt ratio of 0.43. What are the company's debt-to-equity ratio and equity multiplier?
Calculate the power per unit area at the retina : A laser used in eye surgery emits a 3.08 mJ pulse in 1.04 ns, focused to a spot 32.4 um in diameter on the retina. Calculate (in SI units) the power per unit area at the retina
Show the mapping in terms of tag-index and block offset : Main Memory size is 256K words, Cache size is 16K words block size is 32 bytes Show the mapping in terms of tag, index and block offset for direct map, 4 way set associative, fully associative
Calculate the tax on the sale of each asset. : Capital gain taxes Perkins Manufacturing is considering the sale of two nondepreciable assets, X and Y. Asset X was purchased for $2,000 and will be sold today for $2,250. Asset Y was purchased for $30,000 and will be sold today for $35,000...
Calculate the yield to maturity of these bonds today : Five years ago your firm issued a $1,000 par, 20-year bonds with a 6% coupon rate and an 8% call premium. The price of these bonds now is $1103.80. Assume annual compounding.
At what frequency will the current in the circuit be maximum : A 115-? resistor, a 64.6-mH inductor, and a 190-?F capacitor are connected in series to an ac generator. At what frequency will the current in the circuit be a maximum
What is the current value of these securities : What will be the value of these securities in one year if the required return declines to 8 percent?
Find the pressure loss in the heat exchanger is negligible : steam is condensed on the outside of a heated exchanger tube by pressing air through the inside of the tube. the air enters at 1.2 bars, 20 degree c and a speed of 10 m/s. the air exits at 80 degree c. the steam enters 3 bars, 200 degree c
Research on contemporary financial management issues : Research on contemporary financial management issues

Reviews

Write a Review

Finance Basics Questions & Answers

  Which strategy works best if a bidding war erupts

If you were Smith's financial advisor, which strategy would you advise he establish? Or would you argue that he not speculate on this takeover?

  Calculate the current ratio and return on total assets

The following financial statements apply to the next six problems? Calculate the current ratio, debt ratio, profit margin on sales and Return on total assets.

  Finding cost of equity by using capm and npv of the project

Finding Cost of Equity by using CAPM and NPV of the project with that rate - The parent's discount rate for Argentina is 9%. How should the project be financed? Justify your answer numerically.

  Calculating annual rate of return

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 1995, Christie's auctioned the William de Kooning painting Untitled.

  Asymmetric information

The problems associated with asymmetric information to explain why the insurance companies might include deductibles as part of their policies.

  Calculation of conversion price and conversion value

Reading Railroad's common stock is currently priced at $25, and its 8% convertible debentures issued at par, or $1,000 priced at $750.

  Compute the maximum growth rate

The Tapley Corporation is trying to determine an acceptable growth rate in sales. While the company wants to increase, it does not want to use any external funds to support such expansion due to the particularly high interest rates in market now.

  What will be the firm cash cycle

Suppose that Ken-Z Art Gallery has annual sales of $884,000, cost of goods sold of $574,000, average inventories of $160,000, average accounts receivable of $129,000, and an average accounts payable balance of $86,000.

  What is martha cost of equity

Martha's Pancake House, Inc. just paid its annual dividend of $0.80 a share. The stock has a market price of $13.00 and a beta of 1.04. The return on U.S. Treasury bills is 2.5 percent and the market risk premium is 7.3 percent. What is Martha's c..

  What is the convertible bonds conversion premium

The common stock obtained upon conversion is selling for $54 per share. What is the convertible bonds conversion premium?

  What is the relationship between the present value and time

What is the value today of a 10,000 payment made in perpetuity assuming a 8% discount rate?

  What benefit did the venezuelan regime in power gain

What benefit did the Venezuelan regime in power gain from the repeated devaluation of the Bolivar?

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