Coupon bond with twelve years to maturity

Assignment Help Financial Management
Reference no: EM131346662

What is the Macaulay duration of a 6 percent coupon bond with twelve years to maturity and a current price of $1,062.40? What is the modified duration?

Reference no: EM131346662

Questions Cloud

What are portfolio weights of each stock : If you own 600 shares of Alaska Air at $47.68, 650 shares of Best Buy at $56.12, and 400 shares of Ford Motor at $8.71, what are the portfolio weights of each stock? (Round your answers to 3 decimal places.)
Discuss some of the issues with this op-amp oscillations : What is the difference between Op-Amp circuit and Comparator circuit? Discuss some of the issues with this Op-Amp oscillations and explain the voltage swing and cause of potential failure of this circuit.
What is the required return for the winter time stocks : Winter Time Adventures is going to pay an annual dividend of $2.86 a share on its common stock next year. This year, the company paid a dividend of $2.75 a share. The company adheres to a constant rate of growth dividend policy. If the current stock ..
How it affected the employer and the employee : Select one of the following U.S. Federal Pay Regulations.1) Fair Labor Standards Acts of 19382) Title VII of Civil Rights of 19643) Age Discrimination in Employment Acts (ADEA) of 19674) Civil Rights Act of 1991.
Coupon bond with twelve years to maturity : What is the Macaulay duration of a 6 percent coupon bond with twelve years to maturity and a current price of $1,062.40? What is the modified duration?
Use duration to estimate new price of the bond : Consider a 5 percent coupon bond with seven years to maturity and a current price of $1,050.70. Suppose the yield on the bond suddenly increases by 2 percent. Use duration to estimate the new price of the bond.
What is the discount rate on the stock : Top hedge fund manager Diana Sauros believes that a stock with the same market risk as the S&P 500 will sell at year-end at a price of $51. The stock will pay a dividend at year-end of $3.00. Assume that risk-free Treasury securities currently offer ..
Positive earnings but retained earnings deficit at any point : Please give the full name two companies that have had positive earnings but a retained earnings deficit at any point in their history. I'm specifically looking for a company that is paying out a lot of dividends and/or repurchasing their stock.
Draw the initial demand and supply curves : Suppose that the quantity demanded rises by 40 million packs of gum per month at each price.- Draw the initial demand and supply curves as given by the table above. Call this graph Graph 1.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the cost of new preferred equity

Northman’s common equity, debt, and preferred equity are worth $70,000, $10,000 and $20,000 respectively with a total value is $100,000. The company’s common stock is currently listed at $54 per share; new preferred stock sells for $70 per share with..

  What is the company new cost of equity

Pippi’s Puppies Inc. has an unlevered beta of 0.80. The firm currently has no debt, but is considering changing its capital structure to be 30% debt and 70% equity. Its corporate tax rate is 30%, rRF = 4% and the market risk premium is 5%. What is th..

  Alternative current operating assets financing policies

Explain the three alternative current operating assets financing policies in details. In your opinion, what is the best strategy for management with regard to financing current operating assets? Does the answer vary by industry? Does the answer vary ..

  Assume annual coupon payments

Dan is going to buy a 19 year bond that pays a coupon rate of 11.56% per year and has a $1,000 par value. The bond currently priced at $1,326.92. What is the yield to maturity of this bond? Assume annual coupon payments. Round the answer to two decim..

  What is the retailers effective cost of trade credit

A large retailer obtains merchandise under the credit terms of 3/10, net 40, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's e..

  Calculate the selling corporations tax bill

Assuming a corporate income tax rate of 40 percent on all taxable income, calculate the Selling Corporation's tax bill.

  Current market rate of interest on the bright sun bonds

Bright Sun, Inc. sold an issue of 30-year $1,000 par value bonds to the public. The bonds had a 12.95 percent coupon rate and paid interest annually. It is now 5 years later. The current market rate of interest on the Bright Sun bonds is 10.53 percen..

  Fine ounce of gold

The U.S. standard is $ 25.00 per fine ounce of gold. The U.K. standard is £ 5.00 per fine ounce of gold. Transatlantic shipping costs are $ 0.75 per fine ounce of gold. The spot rate is $ 4.80 / £ 1.00 How much profit per fine ounce can be earned..

  Calculate the net present value of each project

Calculate the net present value (NPV) of each project, assess its acceptability, and indicate which project is best, using NPV.

  What is the percentage change in the price of bonds

Both Bond Bill and Bond Ted have 12.4 percent coupons, make semi annual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 22 years to maturity. If interest rates suddenly rise by 3 percent, what is the per..

  Bonds will the firm have to issue to receive required funds

Sincere Stationery Corporation needs to raise $700,000 to improve its manufacturing plant. It has decided to issue a $1000 par value bond with a 12 percent annual coupon rate and a 14-year maturity. How many bonds will the firm have to issue to recei..

  Calculate the expected return and standard deviation

The stock of Bruin, Inc., has an expected return of 17 percent and a standard deviation of 32 percent. The stock of Wildcat Co. has an expected return of 12 percent and a standard deviation of 47 percent. The correlation between the two stocks is .34..

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