What is the current price of this bond

Assignment Help Financial Management
Reference no: EM131047662

Price A $1000 par value bond will mature in 10 years. This bond pays a coupon of $90 every year. If investors require an annual return of 8%, what is the current price of this bond? Assume annual payments.

Reference no: EM131047662

Questions Cloud

Dividends will resume the historical growth : Killnum Corporation announces that the dividend for next period will be $5.00 per share rather than the originally expected $2.50 per share. From then on, it is expected that dividends will resume the historical growth of 5% per year. What would you ..
Included as short term financing : Which of the following would NOT be included as a short -term financing?
Most apt to discourage purchasers from taking discount : Which one of the following is most apt to discourage purchasers from taking a discount?
Stock exchange-calculate debt and equity ratio : Binomial Tree Farm’s financing includes $6.8 million of bank loans. Its common equity is shown in Binomial’s Annual Report at $6.85 million. It has 500,000 shares of common stock outstanding, which trade on the Wichita Stock Exchange at $16.2 per sha..
What is the current price of this bond : Price A $1000 par value bond will mature in 10 years. This bond pays a coupon of $90 every year. If investors require an annual return of 8%, what is the current price of this bond? Assume annual payments.
Assume that the USD-Euro exchange rate : Assume that the USD/Euro exchange rate is currently 1.65 (ie. $1.65/EUR). Simultaneously, suppose the EUR/SFr exchange rate is 0.85 (ie. EUR 0.85/SFr). What is the SFr/USD cross exchange rate? State your answer as SFr/USD , ie. the amount of SFr requ..
Calculate the annual worth of computer-controlled machine : Two stamping machines are under consideration for purchase by a metal recycling company. The manual model will cost $25,000 to buy with an eight-year life and a $5,000 salvage value. Its annual operating costs will be $16,000. Calculate the annual wo..
Extra cash at hand to make some investment : An investor plans to use his extra cash at hand to make some investment. He faces one proposal by a start-up internet company. Here is the detail: he has to invest $25,000 now and will get a return of $5000 per year for 4 years and $2000 a year there..
Market-to-book ratio : Dudley Hill Golf Club's market-to-book ratio is currently 2.1 times and the PE ratio is 6.55 times. Dudley Hill Golf Club's common stock is currently selling at $18.06 per share. What is the book value per share? What is the earnings per share?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the internal rate of return for the machine

Hincapie Manufacturing is evaluating investing in a new metal stamping machine costing $30,924. Hincapie estimates that it will realize $12,000 in annual cash inflows for each year of the machine's 3-year useful life.

  What is discounted payback period for these cash flows

An investment project has annual cash inflows of $4,900, $3,400, $4,600, and $3,800, for the next four years, respectively. The discount rate is 13 percent. What is the discounted payback period for these cash flows if the initial cost is $5,200?

  What is the value of stock in your portfolio

Your portfolio is worth $100,000 and has a beta of 1.12. You have $30,000 of stock A which has a beta of 1.50. The rest of your portfolio is composed of stock B with a beta of 0.84 and stock C with a beta of 1.06. What is the value of stock C in your..

  What is the percentage price change of these bonds

Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 19 years to maturity, make semiannual payments, and have a YTM of 8 percent. If interest rates suddenly rise by 2 percent, what is the percentage price ..

  Difference between the primary-secondary securities markets

What is the key difference between the primary and secondary securities markets? Why are the trades that occur on the secondary market important to a firm’s management?

  Calculate that the degree of operating leverage

At an output level of 48,000 units, you calculate that the degree of operating leverage is 1.40. If output rises to 60,960 units, what will the percentage change in operating cash flow be? (Do not round your intermediate calculations.)

  More reinvestment rate risk than do long-term bonds

All else equal, long-term bonds have more interest rate risk than do short-term bonds. All else equal, high-coupon bonds have more reinvestment rate risk than do low-coupon bonds. All else equal, short-term bonds have more reinvestment rate risk than..

  What is the implied interest rate on a treasury bond

What is the implied interest rate on a Treasury bond ($100,000, 6% coupon, semiannual payment with 20 years to maturity) futures contract that settled at 100'24?

  Walgreen corporation is contemplating a new investment

The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1000 par value bonds with a 15-year maturity at a price of $947 that carry a coupon interest rate of 12.7 percent that is..

  Maturity bond with face value

A 20-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 6%. What is the bond’s yield to maturity if the bond is selling for $1,080?

  Cost of capital and liabilities and equity

Find the 3 weights to be used to determine the cost of capital (Debt, Preferred, and Common equity weights) using market value and book values. Find the component costs (%) for bonds (rd), preferred stock(rp), retained earnings(rs) and new issue comm..

  What is default risk premium on corporate bond

A Treasury bond that matures in 10 years has a yield of 6%. A10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

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