Security is sometimes referred to as amortizing bond

Assignment Help Financial Management

Reference no: EM131043560

Assume that a bond makes 30 equal annual payments of $1,000 starting one year from today. (This security is sometimes referred to as an amortizing bond.) If the discount rate is 3.5% per annum, what is the current price of the bond? (Hint: Recognize that this cash flow stream is an annuity and that the price of an asset is the present value of its future cash flows.)

Reference no: EM131043560

Questions Cloud

Security with the cash flows : You own a security with the cash flows shown below. 0 1 2 3 4 0 610 385 240 320 If you require an annual return of 12%, what is the present value of this cash flow stream? Round your answer to the nearest cent. Do not round intermediate calculations.

Order to make the tuition payments over the next four years : Your daughter will start college one year from today, at which time the first tuition payment of $58,000 must be made. Assuming that tuition does not increase over time and that your daughter remains in school for four years, how much money do you ne..

Determine the social worker professional work preferences : Post a description of the organization that you visited to conduct research for your Agency Paper. Explain the services it provides, the populations it serves, its sources of funding, and its organizational structure.

Explain the applicable laws for the given event : Explain the applicable laws for this type of event and what the tax consequences may be, if any, from the loss of her vehicle.

Security is sometimes referred to as amortizing bond : Assume that a bond makes 30 equal annual payments of $1,000 starting one year from today. (This security is sometimes referred to as an amortizing bond.) If the discount rate is 3.5% per annum, what is the current price of the bond?

What is the operating cash flow or OCF : Ridiculousness, Inc., has sales of $42,000, costs of $20,300, depreciation expense of $1,900, and interest expense of $900. If the tax rate is 35 percent, what is the operating cash flow, or OCF? (Do not round intermediate calculations.)

Normally leads to a decrease in its business risk : As a firm increases the operating leverage used to produce a given quantity of output, this normally leads to an increase in its fixed assets turnover ratio. normally leads to a decrease in its business risk.

Determine the cost of equity capital for the firm : The Allegheny Valley Power Company common stock has a beta of 0.80. If the current risk-free rate is 6.5% and the expected return on the stock market as a whole is 16%, determine the cost of equity capital for the firm (using the CAPM).

Prepare a statement of changes in equity for the year ended : Prepare a statement of changes in equity for the year ended 30 June 2016. Prepare a balance sheet as at 30 June 2016 in vertical format.

User Account

All Pages