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 %

Dividend payout ratio : Find the AFN for the company with the sales of $300, which are projected to grow at a rate of 8% per year. Company’s total assets are $400, and Profit margin is 5%. Accounts payable are $20 and accruals are $10. Dividend payout ratio is 55%. |

Firm recently purchased a new facility costing : A firm recently purchased a new facility costing $984 thousand. The firm financed this purchase with an amortized loan at an interest rate of 8.8 percent APR, with monthly payments of $23.9 thousand. How long will it take to pay off this loan? |

How much do you need to deposit into this trust fund today : You would like to establish a trust fund that would pay annual payments to your heirs of $104 thousand a year forever. You expect the trust fund to earn an average return of 7.57 percent. How much do you need to deposit into this trust fund today to .. |

What would be your total real return on investment : You bought one of Rocky Mountain Manufacturing Co.’s 8.75 percent coupon bonds one year ago for $1,049.30. These bonds make annual payments and mature eight years from now. Suppose that you decide to sell your bonds today, when the required return on.. |

Change in the bonds price in dollars and percentage terms : 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 ag.. |

Trinomial tree model : We try to model an asset with price St at time t = 0,1,2,3,4. Today, S0 = 10. For each case A, B, C below, answer the following questions: What are the possible values of S4 within this model? What is the expected mean and variance of S4? Trinomial T.. |

About spending your entire life working : You are not thrilled about spending your entire life working. So, you have decided that you will save $5 thousand a year, starting at the end of this year, and retire as soon as you can accumulate $1 million. If you can earn an average of 7.89 percen.. |

Started making annual deposits : 5 years ago you started making annual deposits of $362 into an account paying 7% annual return. You continue to make these deposits every year without fail. If you keep doing this every year for the next 5 years, how much money will you have in 5 yea.. |

Calculate what you would be willing to pay for the bond : A $10,000 ten-year bond was issued at an interest rate of 6%. It is now year 9 and you are thinking about buying the bond from its owner. Interest rates are now 9%. (Taylor & Greenlaw, 2014, p. 403). Would you now expect to pay more or less than $10,.. |

## Evaluating two different cookie-baking ovensYou 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 flowsAn 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 earningsBeginning 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 assetsThe 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.. |

## About the coupon bonds-bonds matureLKD 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 probabilityA 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 budgetWhat is a fixed budget? When is it an appropriate means of evaluating a manager’s performance and why? |

## Conduct a current health insurance situation analysisConduct 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 usedThe 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 methodA 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 switchboardThe 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 insuranceVictor 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.. |

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