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Katie Pairy Fruits Inc. has a $3,300, 12-year bond outstanding with a nominal yield of 18 percent (coupon equals 18% × $3,300 = $594 per year). Assume that the current market-required interest rate on similar bonds is now only 12 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the current price of the bond. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.) b. Find the present value of 6 percent × $3,300 (or $198) for 12 years at 12 percent. The $198 is assumed to be an annual payment. Add this value to $3,300.
Calculation of present value of a bond and The bonds pay interest semiannually each June 30th and December 31st and mature on December 31, 2018
Project K costs $45,000, its expected cash inflows are $11,000 per year for 8 years, and its WACC is 8%. What is the project's discounted payback? Round your answer to two decimal places.
what is the net present value (NPV) of the project? What is the internal rate of return? Should the project be purchased?
You plan to deposit $250 into the savings account for each of five years, beginning 1 year from now. Interest rate is 9% compounded annually. Find out the future value in each of the following cases.
Handy Man, Inc. has zero coupon bonds outstanding that mature in 8 years. the bonds have a face value of $1,000 and a current market price of $640. what the company's pre-tax cost of debt?
You read in the Wall Street Journal that thirty day T-bills are currently yielding 5.55. your brother-in-law, a broker at Safe and Sound Securities, has given you following estimates of current interest rate premiums;
An investor has 2 bonds in his portfolio that have a face value of $1000 and pay a 10% yearly coupon. Bond L matures in 15 years, while bond S matures in oine year.
A 10-year bond, with par value equals $1000, pays 10 percent yearly. If similar bonds are currently yielding 6 percent yearly, calculate the market value of the bond.
Given the global financial crisis of 2007-2009, do you anticipate any changes to systems of fixed exchange rates and forward contracts in near future?
you just bought a 6$ coupon bond for $1105. it has a 7-yr remaining maturity, a $1000 face value, and pays semiannual coupons. What will be the bond's price 3 years from now if the market interest rates increase by 2%.
Computation of fixed operating cost for achieving target profits - How large can Rogers' fixed operating costs be if he is to meet his profit target?
An investor who writes standard call options against stock held in his or her portfolio is said to be selling what type of options and for Volpe Corporation's traded call options
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