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You are provided the following info about a bond that was issued 7 years ago. The bond has a par value of $1000, has 8 years until maturity, and carries a 10% coupon with interest being paid annually.
a) What is the bond price today if we assume a theoretical discount rate of 0%? Show the calculation process.
b) What is the yield to maturity if we assume the bond is currently selling for par value? Show the calculation process.
c) If the bond is yielding 12% per annum, is it trading at a premium or a discount? Why?
d) What is the current yield to maturity if we assume the bond is currently priced at $896.64 and you are additionally informed that coupons are paid semi-annually?
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You reflect on these choices as well as other actions that could be taken. Describe the various actions that you might take and their implications.
Bond 3 has a coupon rate of 0.0400, a face value of $10,000, for 20 years, pays dividends on a semi-annual basis, and a required yield (YTM) of 0.0450. What is the bonds valuation?
you are 25 years old and decide to start saving for your retirement. you plan to save 5000 at the end of each year so
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dyl incs bonds currently sell for 1180 and have a par value of 1000. they pay a 65 annual coupon and have a 15-year
The expansion plan can be financed with additional long-term debt at a 12% interest rate or the sale of new common stock at $8 per share. The firm's marginal tax rate is 40%. Determine the indifference level of EBIT for the two financing plans.
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