Treasury bond-what is the present value of the bond

Assignment Help Financial Management
Reference no: EM13809158

A 10-year U.S. Treasury bond with a face value of $10,000 pays a coupon of 6.5% every six months. The semi annually compounded interest rate is 5.0%. What is the present value of the bond?

Reference no: EM13809158

Questions Cloud

Earnings and dividends per share-what is current stock price : ACME Inc’s earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year's dividend is $10 and the market capitalization rate is 8%, what is the current stock price? ACME Inc’s growth will stop after year 3. In year 4 ..
What is the market capitalization rate : Company B does not slow back any earnings and is expected to produce a level dividend stream of $8 a share. If the current stock price is $65, what is the market capitalization rate?
What is the expected real interest rate : The two-year interest rate is 6.5% and the expected annual inflation rate is 3%. What is the expected real interest rate?
Treasury bond-what is the present value of the bond : A 10-year U.S. Treasury bond with a face value of $10,000 pays a coupon of 6.5% every six months. The semi annually compounded interest rate is 5.0%. What is the present value of the bond?
About the interest rate : What interest rate would make it worthwhile to incur a compensating balance of $20,000 in order to get a 1 percent lower interest rate on a 1 year, pure discount loan of $275,000?
Trade credit terms-annualized cost of forgoing the discount : If a firm buys trade credit terms of 4/10, net 60 and decides to forgo the trade credit discount and pay the next day, what is the annualized cost of forgoing the discount assuming a 360 day year?
Abdicating our national sovereignty to foreign regulators : Discuss the move by the SEC towards using international accounting standards (IAS). Do you believe that the use of IASs will make it easier for investors in a global economy, or do you think the SEC is abdicating our national sovereignty to foreign r..
Impact the rating of a bond : Which of the following would impact the rating of a bond?

Reviews

Write a Review

Financial Management Questions & Answers

  Mega company has just signed a contract to export a machine

mega company has just signed a contract to export a machine to bestway enterprises an american corporation. the machine

  What was the irr if the initial investment

The Cornballer, invented by George Bluth in the mid-1970s, is a device used to make cornballs. It sold for $29.95. Suppose that 10,000 Cornballers were sold in 1981; 11,000 in 1982; and sales increasing by 10% each year until it was last sold in 1990..

  Calculate the standard deviations of returns for goodman

Calculate the standard deviations of the returns for Goodman, Landry, and the Market Index. (Hint: Use the sample standard deviation formula given in the chapter, which corresponds to the STDEV function in Excel.) Estimate Goodman’s and Landry’s beta..

  Target capital structure

Patton Paints Corporation has a target capital structure of 40 percent debt and 60 percent common equity, with no preferred stock. Its before-tax cost of debt is 12 percent, and its marginal tax rate is 40 percent. The current stock price is P0 = $22..

  Application using the same cost of carry model

Suppose the spot price for Euro is $1.15, the futures price for delivery in 6 months is $1.1471286. Assume that the 6 month borrowing/lending rate in Euro is 0.75percent (annually, continuous compounding) and the corresponding rate in $ is 0.25percen..

  Cease paying dividends forever-what is current share price

Apocalyptica Corp. pays a constant $9.80 dividend on its stock. The company will maintain this dividend for the next 14 years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share ..

  What is the amount of bid using options contract

What is the amount of bid using Borrowing and Lending, what is the amount of bid using Forward contract and what is the amount of bid using Options contract?

  What is westons cost of equity capital

Weston Industries has a debt-equity ratio of 1.5. Its WACC is 9.2 percent, and its cost of debt is 6%. The Corporate tax rate is 35%. What is Weston’s cost of equity capital? What is Weston’s unlevered cost of equity capital?

  Create synthetic callable debt from non-callable debt

You have graduated, and are on the staff of the Assistant Treasurer of company CKS. (You are an assistant to the Assistant Treasurer.) Your boss, the Assistant Treasurer, recently attended a conference at which he heard that swaptions could be used t..

  What is msrs income tax liability

Medium Size Retailers, Inc. (MSR) has EBIT of $300,000, interest expense of $35,000, dividend income of $30,000, short term capital gains of $15,000, and long term capital losses of $20,000. What is MSR’s income tax liability?

  Complete the financial reporting for each period

Complete the financial reporting for each period

  Return on equity affected by use of financial leverage

Is the return on equity (ROE) affected by the use of financial leverage? Why does this result occur? Should Router choose the capital structure that maximizes its expected ROE? Explain.

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