Change in the bonds price in dollars and percentage terms

Assignment Help Financial Management
Reference no: EM131027097

A \$1,700 face value corporate bond with a 5.6 percent coupon (paid semiannually) has 12 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 7.9 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 9.2 percent. What will be the change in the bond’s price in dollars and percentage terms? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

Change in the bond’s price in dollars       \$

Change in the bond’s price in percentage             %

Write a Review

You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs \$69,500, has a 5-year life, and has an annual OCF (after tax) of –\$11,200 per year. The Keebler CookieMunster costs \$96,000, has a 7-year life, and has an annual OCF (after..

Investment project costs-annual cash flows

An investment project costs \$10,000 and has annual cash flows of \$2,970 for six years. What is the discounted payback period if the discount rate is zero percent? What is the discounted payback period if the discount rate is 6 percent?

How much is the amount in ending retained earnings

Beginning Retained Earnings are \$65,000, sales are \$29,500, expenses are \$33,000, and dividends paid are \$3,500. How much is the amount in ending Retained Earnings?

Cash amount receivables inventory total current assets

The following is from Harrlson Incs financial statements. Sales (all on credit)were \$28.50 millions for 2013 Sales to total assets 1.90 times Total Debt to Total Assets 35% Current Ratio 2.50 times Inventory Turnover 20 days Average Collection period..

LKD Co. has 11 percent coupon bonds with a YTM of 9.5 percent. The current yield on these bonds is 9.9 percent. How many years do these bonds have left until they mature?

Expected loss over the next year with a probability

A stock has an annual return of 11 percent and a standard deviation of 44 percent. What is the smallest expected loss over the next year with a probability of 1 percent?

What is a fixed budget

What is a fixed budget? When is it an appropriate means of evaluating a manager’s performance and why?

Conduct a current health insurance situation analysis

Conduct a current health insurance situation analysis for the Bedos. Be sure to assess the following: a. The after-tax costs of their current plans compared to purchasing an individual policy. b. The use of a tax-advantaged account as a health insura..

How should the weighted marginal cost of funds be used

The weighted marginal cost of funds is used in pricing decisions. Explain how it should be used if the loan being priced exhibits average risk. How should the weighted marginal cost of funds be used if the loan carries above average risk?

Using the macrs depreciation method

A company has decided to purchase new office furniture with a useful life of 12 years for \$100,000. Sales tax for the furniture was \$6,000, and inbound transportation costs were \$4,000. The new furniture will be kept for 10 years before being sold. I..

Installation of an automatic telephone switchboard

The management of a private hospital is considering the installation of an automatic telephone switchboard, which would replace a manual switchboard and eliminate the attendant operator's position. The class of service provided by the new equipment i..

Find the cash value of insurance

Victor has a \$10,000 cash-value policy purchased 15 years ago when he was 25 years old. The policy will be paid at age 65. Find the cash value of insurance. Jack earned 6.5% last year on a \$7500 investment in taxable bonds. If the applicable tax rate..

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!