### Computation of the current price of the bond

Assignment Help Finance Basics
##### Reference no: EM1315671

Computation of the current price of the bond

Use the following information to answer the next two problems

1. The Wallace Company has issued a 10-year, \$1,000 bond, which pays 12% interest annually. If your required annual rate of return for an investment of this risk is 16%, what is the value of this bond to you?

2. What is the value of the same bond if the interest is paid semi-annually?

#### Questions Cloud

 Pair of dice probability : A pair of dice is rolled. What is the probability of each of the following? (Round your answers to three decimal places.) Determining number of vehicles passing from one point : Determine expectation of number of vehicles passing through this specified point in ten minutes. Fund management and bond valuation : Multiple choice questions on cash, fund management ans bond valuation - Which of the following is not one of the components that makes up the required rate of return on a bond Algorithm to prepare a job applicant report : Develop an algorithm in order to prepare a job applicant report. Input consists of a series of records that contain the Social Security number or equivalent, last name, first name, middle initial, verbal test score, science test score, math test s.. Computation of the current price of the bond : Computation of the current price of the bond and What is the value of the same bond if the interest is paid semi-annually Calculation of current market price of the share : Calculation of current market price of the share and  What is the intrinsic value of the warrant and What is the speculative premium on the warrant? Probability based on relative frequency : What is the probability that a roulette ball will come to rest on an even number other than 0 and 00? Declaration of dividend and payment of dividend : Journal entries to record issuance of stock, declaration of dividend and payment of dividend - Write journal entries to show the effect of issuance of common stock and preferred stock on January 1, 2008. Algorithm to read an arbitrary number : Develop an algorithm to read an arbitrary number of the data records, each consisting of a name, age, and code. A Code of 1 will indicate female, a code of 2 will indicate male.

### Write a Review

#### Calculation of modified internal rate of return

Calculation of Modified Internal Rate of Return [MIRR] of even cash flows and You have calculated a cost of capital of 12% for ASI

#### Calculation of standard deviation

Calculation of Standard Deviation and which of these two properties is perceived to be riskier by the market

#### Objective type questions on decision on investments

Objective type questions on decision on investments, inventory and risk management and Common stockholders are most concerned with

#### Determining the proper cash flow amount

Determine the proper cash flow amount to use as initial investment in fixed assets when estimating this project? Describe why?

#### Computation of promised yield to maturity for cardiotronics

Computation of promised yield to maturity for Cardiotronic's zero coupon bonds and the probability of default that is implicit in the price of Cardiotronics outstanding zero-coupon bonds

#### Computation of the interest on the loan payable in due

Computation of the interest on the loan payable in due and in advance and What will be the face value of the note assuming that Interest paid when the loan is due

#### Lease and buy decision making using present value technique

Lease and Buy decision making using present value technique and Calculate the present value of the cash flows for both the lease and the purchase alternatives

#### Expect share you select to affect return

Would you expect share you select to affect return that you earn on your portfolio. Go through the method of working out why C is the best option for portfolio.

#### What is stock valuation under equilibrium situation

What is Stock valuation under equilibrium situation and Assuming the stock market is efficient and the stocks are in equilibrium

#### Describing non-value maximizing mergers in finance world

Describe how Agency problems can lead to non-value maximizing mergers in finance world.

#### Computing the annual present value cost of maintenance

Compute the annual present value cost of maintenance (15 years).

#### Calculation of npv of lease payments

Calculation of NPV of lease payments and capital contribution decision to the lease project proposed and Why did you select the cash flow level and the discount rate that you used