What is the current market value of one of these bonds

Assignment Help Finance Basics
Reference no: EM13268175

Maryland Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 9.93 percent. The current market rate for similar securities is 10.79 percent

a. What is the current market value of one of these bonds

b. What will be the bond's price if rates in the market (i) decrease to 8.79 percent or (ii) increase to 12.79 percent

c. How do the interest rate changes affect premium bonds and discount bonds. Bonds, in general, pixel.gif(increase/decrease)? in price when interest rates go up. When interest rates decrease, bond prices pixel.gif(increase/decrease)?

d. Suppose the bond were to mature in 12 years. What will be the bond's price if rates in the market (i) decrease to 8.79 percent or (ii) increase to 12.79 percent

 

Reference no: EM13268175

Questions Cloud

What is the yield to maturity on these bonds : Serengeti Corp. has five-year bonds outstanding that pay a coupon of 11.86 percent. If these bonds are priced at $1,075.57. Assume semiannual coupon payments.
Determine what is the cost of heat without the installation : The heat loss through the exterior walls of a certain poultry processing plant is estimated to cost the owner $3,000 next year. A salesman from Superfiber Insulation, Inc., has told you, the plant engineer, that he can reduce the heat loss by 80%
How to calculate the molecular weight of the compound : A quantity of 7.48g of a compound is dissolved in water to make 300 mL of solution. The solution has an osmotic pressure of 1.43 atm at 27 Celsius. Calculate the molecular weight of the compound.
What is the power of one laser pulse : LASIK eye surgery uses pulses of laser light to shave off tissue from the cornea, reshaping it. What is the power of one laser pulse
What is the current market value of one of these bonds : Maryland Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 9.93 percent. The current market rate for similar securities is 10.79 percent.
What was the dollar value of the underpricing associated : On August 19, 2004 Google issued its IPO of 18.7 million shares to the initial investors at $82.42 per share. The closing price of the stock that same day was $98.08. What was the dollar value of the underpricing associated with the Google IPO?
Define the freezing point of pure benzene : The freezing point of pure benzene is 5.5 Celsius and its freezing point constant is 5.12 C/m. Calculate the molecular weight of the unknown.
What was the loss to the company due to underpricing : When Global Partners went public in September 2008, the offer price was $22.00 per share and the closing price at the end of the first day was $24.10. The firm issued 5.30 million shares. What was the loss to the company due to underpricing?
Explain what is the vapor pressure of a solution made : what is the vapor pressure of ethanol at 20 celcius is 44mm, and the vapor pressure of methanol at the same temperature is 94 mm. Assuming an idea solution, what is the vapor pressure of a solution made from 30.0g of methanol and 45 g of ethanol

Reviews

Write a Review

Finance Basics Questions & Answers

  What is their yield to maturity

Thatcher Corporation's bonds will mature in 20 years. The bonds have a face value of $1,000 and an 12% coupon rate, paid semiannually. The price of the bonds is $850. The bonds are callable in 5 years at a call price of $1,050. Round your answers ..

  Computation of price of the bonds

Computation of Price of the bonds and What is an estimate of the price of the annual coupon bond

  Computing average rate of return

Stock A and Stock B have the following historical returns: Compute the average rate of return for each stock during the period 1998 through 2002.

  Advantages and disadvantages of mergers and acquisitions

What are the advantages and disadvantages of mergers and acquisitions to the economy and what are some ways the government is involved in them, and should the government be more or less involved?

  How much does a share of preferred stock cost today

E-Eyes.com Bank just issued some new preferred stock. The issue will pay an annual dividend of $17 in perpetuity, beginning 6 years from now. If the market requires a return of 3.1 percent on this investment, how much does a share of preferred sto..

  Calculations of cost per equivalent unit for materials

McMillian Tire Corporation produces tires used on small trailers. In the month of June ended with 500 tires in process, 90% finished as to direct materials

  What is the npv of the new production line

The tax rate is 35 percent, the opportunity cost of capital is 10 percent, and the annual rate of inflation is 4.90 percent. What is the NPV of the new production line?

  Calculate the current price of the stock

company x is expected to pay an year-end dividend of $8 a share on its common stock. after the dividend payment the stock is expected to sell at $100 per share. the required rate of return on the common stock is 20%. then, calculate the current pr..

  What is the value of a perpetuity with an annual payment

What is the value of a perpetuity with an annual payment of $50 and a discount rate of 4%?

  Remake the by factoring out the greatest common factor

The value of an investment of 'P' dollars for 't' years at simple interest rate "r" is given by A= P + Prt. Remake this formula by factoring out the greatest common factor

  Why are consumers considered to be risk averse

Why are consumers considered to be risk averse? What methods could used to deal with risk?

  Making decision through online information

Juan, a friend of yours, just inherited some amount from his great-aunt & is trying to decide how to invest it. He has come up with some firms that he's interested in & has been doing a little research online.

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