Equal to the present value of the redemption amount

Assignment Help Financial Management
Reference no: EM13728696

A bond with face and redemption amount of $3000 with annual coupons is selling at an effective annual yield rate equal to twice the coupon rate. The present value of the coupons is equal to the present value of the redemption amount. What is the selling price of the bond?

Reference no: EM13728696

Questions Cloud

What is the stock price according to the constant growth : The last dividend of Gamma, Inc was $7.55, the growth rate of dividends is expected to be 4.76%, and the required rate of return on this stock is 14.86%. What is the stock price according to the constant growth dividend model (Gordon model)?
Supply and demand analysis and marginal analysis : Discuss why both supply and demand analysis and marginal analysis must be used in making rational business decisions. Please include specific examples in your discussion posts. Also include the difference between substitutes and complements and the d..
Explain the differences between the unit overhead costs : Discuss the advantages and disadvantages of organization aldecentralisation - Explain the differences between the unit overhead costs in percentages between (a) and (b) above.
Relationships between sales and expenditures : Please share your understanding of the relationships between sales and expenditures. You are encouraged to discuss all of the marketing, advertising, promotions, and any other expenditures related to sales.
Equal to the present value of the redemption amount : A bond with face and redemption amount of $3000 with annual coupons is selling at an effective annual yield rate equal to twice the coupon rate. The present value of the coupons is equal to the present value of the redemption amount. What is the sell..
Summary of selected important developments in humanities : Provide a brief summary of selected important developments in the humanities that characterize the period. Then, select two specific works of art or architecture from each period to illustrate your argument.
How are business models influenced by internal factors : How are business models influenced by internal and external factors
Zero safety stock would be advantageous for the organization : What parameters would lead you to believe that (a) large safety stock, (b) small safety stock, and (c) zero safety stock would be advantageous for the organization. Be sure to provide examples and data in support.
Convertible semi-annually for the last five years : Find the price of a $1000 par value 10-year bond with coupons at 8.4% convertible semi-annually, which will be redeemed at $1050. The bond is bought to yield 10% convertible semi-annually for the first five years and 9% convertible semi-annually for ..

Reviews

Write a Review

Financial Management Questions & Answers

  Discuss the following topic should speculators use currency

discuss the following topic should speculators use currency futures or options? many multinational firms use currency

  Compute the projects payback period

Draw a time line to show the cash flows of the project and compute the project's payback period, net present value (NPV), profitability index (PI), and internal rate of return (IRR).

  Evaluating a project for a small manufacturing firm

You are evaluating a project for a small manufacturing firm. The firm has provided the following information: the initial cost of the project is $2,500 for equipment purchase; the CCA rate is 10 percent; tax rate is 25 percent; and the pre-tax cash f..

  The green motorcar company is producing a new car it is

the green motorcar company is producing a new car. it is flex-fuel plug-in hybrid. a flexfuel vehicle has an engine

  Suppose that the availability heuristics makes people more

assume that the availability heuristics makes people more risk averse populations drop at least in the short term.

  What actions can it take to be in compliance

If the Friendly National Bank experiences a required reserves deficit, what actions can it take to be in compliance with the existing required reserves ratio?

  1 a if there is 10 inflation in mexico 15 inflation in

1. a if there is 10 inflation in mexico 15 inflation in turkey and the turkish lira weakens by 20 relative to the

  Concept of cost of capital mace manufacturing

Concept of cost of capital Mace Manufacturing is in the process of analyzing its investment decision-making procedures. Two projects evaluated by the firm recently involved building new facilities in different regions, North and South.

  What is the price of the stock today

Upper Gullies Corp. just paid a dividend of $2.10 per share. The dividends are expected to grow at 21 percent for the next eight years and then level off to a growth rate of 7 percent indefinitely. If the required return is 14 percent, what is the pr..

  Addition net working capital investments

Production of the implants will require $1,800,000 in net working capital to start and addition net working capital investments each year equal to 15 percent of the projected states sales increase for the following year. Total fixed costs are $2,500...

  What is the current bond price

App Store Co. issued 17-year bonds one year ago at a coupon rate of 6.3 percent. The bonds make semi-annual payments. If the YTM on these bonds is 5.5 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer..

  What is the net present value and internal rate of return

What is the Net Present Value (NPV) and Internal Rate of Return (IRR) of spending $350 today on an energy efficient appliance which will save you $150 a year for the next three years assuming you could invest this money elsewhere and earn 10%?

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