Consider bond with par value

Assignment Help Financial Management
Reference no: EM13944586

Consider a bond with a par value of 1,000 paying a coupon rate of 6.8% per year semiannually when the market interest rate is only 3% per half year. The bond has 4 years until maturity. What is the bond's price today? A. $965.63 B. $1,028.08 C. $1,035.10 D. $969.43 E. $1,000.00

Reference no: EM13944586

Questions Cloud

What is your portfolio return : Proficient-level: "Year-to-date, Oracle had earned a −1.34 percent return. During the same time period, Valero Energy earned 7.96 percent and McDonald's earned 0.88 percent. If you have a portfolio made up of 30 percent Oracle, 25 percent Valero Ener..
Using the black-scholes option pricing model : The current stock price of Oracle is $31 and the stock does not pay dividends. The instantaneous riskfree rate of return is 5%. The instantaneous standard deviation of Oracle's stock is 30%. You wish to purchase a call option on this stock with an ex..
Qualitative testing-horizontal analysis-vertical analysis : Testing the validity of your calculations by subjecting them to change is known as-Qualitative testing, Horizontal analysis, Vertical analysis, Sensitivity analysis.
You are analyzing the after-tax cost of debt for a firm : You are analyzing the after-tax cost of debt for a firm. You know that the firm’s 12-year maturity, 9.10 percent semi-annual coupon bonds are selling at a price of $767.17. These bonds are the only debt outstanding for the firm. What is the after-tax..
Consider bond with par value : Consider a bond with a par value of 1,000 paying a coupon rate of 6.8% per year semiannually when the market interest rate is only 3% per half year. The bond has 4 years until maturity. What is the bond's price today? A. $965.63 B. $1,028.08 C. $1,03..
Competitive advantage from a theoretical perspective : An academic discussion of what constitutes sustainable competitive advantage from a theoretical perspective
Use for debt when calculating the cost of capital : Bennington Industrial Machines issued 142,000 zero coupon bonds seven years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.2 percent. Interest rates have recently increased, and the bonds now have a yield to maturity..
Discuss the requirements for remote administration : Discuss the requirements for remote administration, resource management, SLA management and billing management of Google App Engine.
The market capitalization rate on the stock : The market capitalization rate (required rate of return) on the stock of Aberdeen Wholesale Company is 10%. Its expected ROE is 12% and its expected EPS is $5.00. If the firm's plow-back ratio is 50%, its dividend growth rate (g) will be __________. ..

Reviews

Write a Review

Financial Management Questions & Answers

  Initial investment-operating cash inflows-terminal cash flow

Lasting Impressions (LI) Company is a medium-sized commercial printer of promotional advertising brochures, booklets, and other direct-mail pieces. The firm’s major clients are ad agencies based in New York and Chicago. For each of the two proposed r..

  Expected net cash inflows-traditional payback period

Project S costs $2100 up front, and its expected net cash inflows are $840 per year for 8 years (with the first inflow occurring one year from today). If the WACC is 11%  the project's NPV is $_________. Project L costs $3600, its expected cash inflo..

  What must the risk-free rate be

A stock has an expected return of 14 percent, its beta is 1.25, and the expected return on the market is 12 percent. What must the risk-free rate be? (Do not round your intermediate calculations.)

  What is the rate of return on the fund

Consider a mutual fund with $640 million in assets at the start of the year, and 4 million shares outstanding. If the gross return on assets is 15% and the total expense ratio is 5% of the year end value, what is the rate of return on the fund?

  Maximum interest rate he should accept in order to buy seats

Jimmy wants to purchase a new set of bucket seats for his van. He has bad credit, so he finds a place that will sell him the seats via an add-on loan. The seats cost $900 total. Jimmy in willing to pay up to $90 per month for one year for these seats..

  What is the required return on the companys stock

Tell Me Why Co. is expected to maintain a constant 4.8 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 6.6 percent, what is the required return on the company’s stock?

  What value would kruger place on the mcintyre stock

If Kruger requires a 12 percent rate of return on investments of this type, what value would Kruger place on the McIntyre stock?

  Tax rate schedule-how much gain is included in gross income

Scot and Vidia, married taxpayers, earn $184,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule). This year, Fred and Wilma sold their home (sales price $750,000; cost $200,000). Al..

  What would the firms payout ratio be

Suppose a firm pays total dividends of $330,000 out of net income of $2.8 million. What would the firm's payout ratio be?

  Best matches the primary goal of financial management

Which one of the following best matches the primary goal of financial management?

  Calculate the expected return of your portfolio

Suppose you have a portfolio consists of stock A and stock B. The total value of your portfolio is $150,000. Out of the total value $97,500 was invested in stock B and the rest in stock A. Calculate the Expected Return of your portfolio.

  About the credit quality of the borrower

A bank makes a loan of $200,000 and will receive payments of $1,911.30 each month for 15 years. How much (in dollars) would the bank have to charge in points (or, an origination fee) if it were concerned about the credit quality of the borrower and r..

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