Expect the yield to maturity to remain

Assignment Help Financial Management
Reference no: EM131020098

You own a bond with the following features: 7 years to maturity, face value of $1000, coupon rate of 3% (annual coupons) and yield to maturity of 7.8%. If you expect the yield to maturity to remain at 7.8%, what do you expect the price of the bond to be in two years?

Reference no: EM131020098

Questions Cloud

Earn an effective annual return on its consumer loans : Magnus Credit Corp. wants to earn an effective annual return on its consumer loans of 16.5 percent per year. The bank uses daily compounding on its loans. Required: What interest rate is the bank required by law to report to potential borrowers?
The payments are an annuity due-ordinary annuity : Suppose you are going to receive $11,000 per year for five years. The appropriate interest rate is 9 percent. What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value of the payments if the p..
What is the APR of the loan : You have arranged for a loan on your new car that will require the first payment today. The loan is for $43,500, and the monthly payments are $740. Required: If the loan will be paid off over the next 79 months, what is the APR of the loan?
Capital to start-additional net working capital investments : Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 79,000 2 92,000 3 106,000 4 101,000 5 82,000 Production of the implants will require $1,580,000 in net working capital to sta..
Expect the yield to maturity to remain : You own a bond with the following features: 7 years to maturity, face value of $1000, coupon rate of 3% (annual coupons) and yield to maturity of 7.8%. If you expect the yield to maturity to remain at 7.8%, what do you expect the price of the bond to..
Net working capital at the end of the projects life : Determine the change in net working capital that appears warranted for the following proposed project: Inventory levels will increase 20% from their current value of $500,000; cash will increase by $25,000; wage accruals will increase by $60,000; Wha..
What was the corporations market-to-book ratio : Last Year, a corporation had a book value of equity of $350 million of USDs, 1 million shares outstanding, and a market price of $40 per share. The corporation also had cash of $3 million of USDs, and total debt of $360 million USDs. What was the cor..
What do you expect the price of the bond to be in two years : You own a bond with the following features: 9 years to maturity, face value of $1000, coupon rate of 2% (annual coupons) and yield to maturity of 5.7%. If you expect the yield to maturity to remain at 5.7%, what do you expect the price of the bond to..
Loss with the terminal stock price for portfolio consisting : Draw a diagram showing the variation of an investor’s profit and loss with the terminal stock price for a portfolio consisting of One share and a short position in one call option. Two shares and a short position in one call option. One share and a s..

Reviews

Write a Review

Financial Management Questions & Answers

  What was the cash flow to investors from operating activity

Sunset Corporation reported EBITDA of $7,300,125 and net income of $3,328,950 for the fiscal year ended December 31, 2014. During the same period, the company had $1,155,378 in interest expense, $1,023,285 in depreciation and amortization expense and..

  About the net income after-tax

Delta Ray Brands Corp. just completed their latest fiscal year. The firm had sales of $17,098,900. Depreciation and amortization was $857,400, interest expense for the year was $866,400, and selling general and administrative expenses totaled $1,481,..

  Net revenues in excess of expenses

Community Hospital is a nonprofit, general acute-care hospital located in a wealthy suburb of City. Last year, it reported revenues of $100 million, and a “profit” (net revenues in excess of expenses) of $12 million.  The cost (essentially the pro-ra..

  What is the approximate future value compounded monthly

What is the approximate future value compounded monthly, of a current investment of $28,000 at an annual interest rate of 3.5% for the next 20 years?

  What should the share price be in one year

A share of stock sells for $44 today. The beta of the stock is 1.6, and the expected return on the market is 12 percent. The stock is expected to pay a dividend of $.70 in one year. If the risk-free rate is 4.3 percent, what should the share price be..

  Calculate the weighted average cost of capital

Based on the information below, calculate the weighted average cost of capital. Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years ago at a coupon rate of 10%. They had 25-year terms and $1,000 face..

  Weighted average of implied by two outstanding debt issues

Dinklage Corp. has 10 million shares of common stock outstanding. The current share price is $82, and the book value per share is $5. The company also has two bond issues outstanding. Suppose the most recent dividend was $5.40 and the dividend growth..

  Semi-annually and the market yield

Find the price of the following Bond X The interest rate on the bond is 8%, paid semi-annually and the market yield is 9%. The maturity is 10 years

  Discuss the following topic does arbitrage destabilize

discuss the following topic does arbitrage destabilize foreign exchange markets? arbitrage can be loosely defined as

  What was net working capital-net operating working capitials

Last year Rattner Robotics had $5 million of operating income. Its depreciation expense was $1 million, its interest expense was $1 million, and its corporate tax rate was 40%. What was the company's net income? What was its net operating working cap..

  Type of company would the change be more valuable

The government is considering a proposal to allow even greater accelerated depreciation deductions than those specified by MACRS. For which type of company would the change be more valuable, a company facing a 10% tax rate on one facing a 30% tax rat..

  Discuss the risk–return trade-offs of the two projects

Blair Gasses and Chemicals is a supplier of highly purified gases to semiconductor manufacturers. A large chip producer has asked Blair to build a new gas production facility close to an existing semiconductor plant. Find the breakeven cash inflow fo..

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