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a. Determine the current market prices of the following $1,000 bonds if the comparable rate is 10 percent and answer the following questions. XY 5 1/4 percent (interest paid annually) for 20 years AB 14 percent (interest paid annually) for 20 years b. Which bond has a current yield that exceeds the yield to maturity? (show calculations) c. Which bond may you expect to be called? Why? d. If there is a CD bond with a 5 1/4 percent coupon and a maturity of 20 years but which was lower rated, what would be its price relative to the XY bond? Explain. c. Since the CD and XY bonds are identical with regard to interest paid and term to maturity, the factor that differentiates them is the credit rating. The CD bond has a lower credit rating, so its value relative to the XY bond should be less. Such a lower price will increase the yield to the investor and presumably would be necessary to induce the investor to purchase the riskier bond.
Currencies fluctuate in value in terms of each other and some are hard and convertible while others are not. Please reference your local newspaper in the financial section
Becker Financial recently declared a 2-for-1 stock split. Prior to the split, the stock sold for $85 per share. If the firm's total market value is unchanged by the split, what will the stock price be following the split?
A corporation uses a Miller-Orr cash management approach with a lower limit of $50,000, an upper limit of $130,000, and a target balance of $75,000.
sweet treats common stock is currently priced at 18.53 a share. the company just paid 1.25 per share as its annual
Heinz Company bonds carry a coupon of 8% and will mature in 5 years at $1,000. Newly issued five year bonds with similar characteristics are yielding 4 percent.
jungle inc. has a target debt-equity ratio of 0.81. its wacc is 11 percent and the tax rate is 34 percent.requireda if
Jillian is convinced that she was fired because of her age since she is the only person over 22 in her office. Can she sue her start-up company for age discrimination? Why or why not?
under the basel ii capital accord banks that have obtained prior regulatory approval can use the internal models
Hart Enterprises recently paid a dividend, Do, of $1.25. It expects to have nonconstant growth of 20% for 2 years followed by a constant rate of 5% thereafter. The firm's required return is 10%.
Calculation of the risk-free rate or the rate of return on a risk-free portfolio and suppose that securities A and B are perfectly negatively correlated
Describe why strengthening basis benefits a short hedge and hurts a long hedge.
If the exchange rate remains at 5.10 pesos per dollar through the end of the loan period, what effective annual interest rate will Blenman end up paying on the loan?
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