The intrinsic value of the bond

Assignment Help Financial Management
Reference no: EM13950292

A coupon bond that pays interest annually has a par value of $1,000, matures in seven years, and has a yield to maturity of 9.3%. The intrinsic value of the bond today will be how much if the coupon rate is 8.5%. (whole number and cents if necessary)

Reference no: EM13950292

Questions Cloud

Explain the phenomenon of persistent poverty : Use one theoretical perspective to explain the phenomenon of persistent poverty: Structural-Functionalist or Conflict. Pick the one you think explains more about inequality and explain specifically why
Approximate after-tax cost of debt for a new issue of bonds : The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 10%. The corporate tax rate is 37%. What would be the approximate after-tax cost of debt for a new issue of bonds?
Should an established patient be allowed to just : Should an established patient be allowed to just "call-in" to the doctor's office and receive prescription refills without coming in for an office visit?What risks does this pose for the physician's office by 'just "calling in meds"?
Negligible kinetic and potential energy effects : Air at 1 atm  with  dry-bulb  and  wet-bulb temperatures of 82 and 688F, respectively, enters a duct with a mass flow rate of 10 lb/min and is cooled at essentially constant pressure to 628F. For steady-state operation and negligible kinetic and p..
The intrinsic value of the bond : A coupon bond that pays interest annually has a par value of $1,000, matures in seven years, and has a yield to maturity of 9.3%. The intrinsic value of the bond today will be how much if the coupon rate is 8.5%. (whole number and cents if necessary)
Quality control consists of testing and defect management : The current environment consists of Development (sized at about 30% of production), Disaster Recover /Operational Recovery servers, and Production servers. The business area consists of about 300 Wintel desktop and laptop computers. The VP of Tech..
Divide by two to approach bond convention : A bond trading at $982 has a current yield of 7.38%. What is the coupon percent (annual - no need to divide by two to approach bond convention)?
Prepare comparative income statements : Prepare comparative income statements for year 2011 in comparison to year 2010. Prepare common-size comparative balance sheet for years 2011 and 2010
Social media and socialization survey matrix : Access the "Social Media and Socialization Survey" and "Social Media and Socialization Survey Matrix." Use the "Social Media and Socialization Survey" to take the survey yourself and ask three people in various age groups to take the survey

Reviews

Write a Review

Financial Management Questions & Answers

  The divorce settlement stipulated

Patricia and Joe Payne are divorced. The divorce settlement stipulated that Joe pay $500 a month for their daughter Suzanne until she turns 18 in 4 years. Interest is 12% a year. How much must Joe set aside today to meet the settlement?

  Bas proposed two types of payment plans

Skiffertons , an investment banking firm bas proposed two types of payment plans for the IPO being considered by Dakota Drilling, a manufacturer of oil drilling equipment. The first is a firm commitment of E5,000,OOO.

  Development-current status of marketing research function

Outline the development and current status of the marketing research function. What are the differences between full-service and limited-service research suppliers? List and explain the steps in the marketing research process. Trace a hypothetical st..

  What amount of the payroll department costs

Medusa Company allocates costs from the payroll department (S1) and the maintenance department (S2) to the molding (P1), finishing (P2), and packaging (P3) departments. Medusa uses the direct method to allocate costs. Round all answers to the nearest..

  Approximate real rate of return on this investment

Last year, you purchased a stock at a price of $53 a share. Over the course of the year, you received $2 in dividends and inflation averaged 2.8 percent. Today, you sold your shares for $53.9 a share. What is your approximate real rate of return on t..

  1 identify and explain three types of start ups firms give

1 identify and explain three types of start ups firms. give a illustration of one you have dealt with.2 what is a

  What is the expected annual cash flow

Cooper Commons is considering purchasing new, technologically advanced solar panels. The equipment will cost $625,000 with a salvage value of $50,000 at the end of its useful life of 10 years. The excess electricity from the panels will be sold back ..

  Why are derivatives important to the financial community

Why are derivatives important to the financial community? Does the government regulate the market? How can there be such a meltdown?

  What is the interest tax shield

Fleury Co. has a 34 percent tax rate. Its total interest payment for the year just ended was $37.4 million. What is the interest tax shield?

  However different interest rates can be assumed

If you had just won $5,000,000 from a lottery, describe the advantages and disadvantages of receiving a lump sum today or a ten-year annuity. Discuss other factors that are relevant or needed to make this decision. No interest rate is given, however ..

  Purchased a zero-coupon bond one year ago

You purchased a zero-coupon bond one year ago for $281.33. The market interest rate is now 7 percent. If the bond had 19 years to maturity when you originally purchased it, what was your total return for the past year?

  Discounted payback

A project has an initial cost of $35,000, expected net cash inflows of $8,000 per year for 7 years, and a cost of capital of 11%. What is the project's discounted payback period?

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