What is the market value of the bond

Assignment Help Financial Management
Reference no: EM13885065

A fourteen-year bond, with par value equals $1,000, pays 10% annually. If similar bonds are currently yielding 9% annually, what is the market value of the bond? Use semi-annual analysis.

Reference no: EM13885065

Questions Cloud

What is the value of a stock with an expected dividend : If expected dividends grow at 6% and the appropriate discount rate is 10%, what is the value of a stock with an expected dividend of $2.75?
Weighted-average process costing to account for production : Victory Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. Instead of being 30% complete with respect to ..
How much does she need to place in a saving account today : Camila plans to go for vacation to Australia in 11 years from now. She estimates that she will need $26,222 for the trip. How much does she need to place in a saving account today that earns 5.12 percent per year (compounded quarterly) to accumulate ..
Hamptons home of a famed socialite hits the market : “Before there was Paris Hilton, there was Consuelo Vanderbilt Balsan – a Gilded Age heiress and socialite, re-nowned for her beauty and wealth. Now Ms. Balsan’s onetime Hamptons home is slated to hit the market priced at $28 million with Tim Davis of..
What is the market value of the bond : A fourteen-year bond, with par value equals $1,000, pays 10% annually. If similar bonds are currently yielding 9% annually, what is the market value of the bond? Use semi-annual analysis.
How many shares must be issued to net the company : ABC Furniture would like to go public to raise $90 million to support expected growth. Their investment bank charges the following: 6.6% underwriting spread for a firm commitment $421,907 in legal fees. The underwriter believes the IPO will be priced..
Shares tomorrow in a seasoned equity offering : Pete's Pasta went public five years ago with an issuance of 5 million shares which, as of yesterday, were trading at $51.68 per share. They are looking to raise capital to start up a chain of brewpubs in the Detroit area by issuing an additional 1.3 ..
Considering investing in project with characterisitics : You’re considering investing in a project with the following characteristics: Compute the NPV of the project if the tax rate is 0% per year. Is the IRR in this case higher or lower than 20%?
Promises to generate cash flow : At a Discount Rate of 9.5%, a plot of land that promises to generate a cash flow of $ 12,000 per year forever Is worth:

Reviews

Write a Review

Financial Management Questions & Answers

  Principles of risk management and insurance

Sam, age 35, and Kathy, age 33, are married and have a son, age 1. Sam is employed as an accountant and earns $75,000 annually. Kathy is a professor of finance at a large state university and earns $150,000 annually. Sam is killed instantly in an aut..

  Current stockholders to purchase one additional share

The Holyoke Corporation has 120,000 shares outstanding with a current market price of $8.10 per share. The company needs to raise an additional $36,000 to finance new expenditures, and has decided on a rights issue. The issue will allow current stock..

  Describe the characteristics of ladder investment strategy

Describe the characteristics of the ladder investment strategy and compare them to the barbell investment strategy. Why should the barbell strategy outperform the ladder strategy in a stable or declining interest rate environment? Why should the ladd..

  Company using the free cash flow valuation model

Which of the following is the appropriate way to calculate the price of a share of a given company using the free cash flow valuation model?

  What is the effect on pretax earnings

Danville Bottlers is a wholesale beverage company. Danville uses the FIFO inventory method to determine the cost of its ending inventory. Ending inventory quantities are determined by a physical count. For the fiscal year-end June 30, 2011, ending in..

  After tax salvage value

Kennedy Air Services is now in the final year of a project. The equipment originally cost $22 million, of which 75% has been depreciated. Kennedy can sell the used equipment today for $5.5 million, and its tax rate is 40%. What is the equipment's aft..

  An investment advisor is recommending bond

If an investment advisor is recommending a bond that is essentially risk free, that is, a bond that is guaranteed by the US government (e.g. Ginnie Mae), does that advisor have an obligation to explain the investment risk to his/her client fully?

  Prepare a loan amortization table

To expand its operation, Amarillo Industries has applied to the Local Bank for a 3-year, $3,500,000 loan. Prepare a loan amortization table assuming 10 percent rate of interest. Be sure to show “payment”; “principal” and “interest” for each year.

  Encompasses the operational financial

Establish five (5) key objectives for Eastman Kodak that encompasses the operational, financial, human resource aspects of the business. Next, argue that each of the established objectives is essential to the success of the company within the Cloud s..

  What would the effective interest rate be on this loan

Wu Corporation has been offered a loan of $1,000,000 at a rate of 8.5%, simple interest, with monthly interest payments and a 365-day year. What would the effective interest rate be on this loan? If Wu's $1,000,000 loan had been 8.5%, add-on, payable..

  Break-even quantity

Shapland Inc. has fixed operating costs of $550,000 and variable costs of $35 per unit. If it sells the product for $75 per unit, what is the break-even quantity?

  What can a bank do to increase its core deposits

What can a bank do to increase its core deposits? What are the costs and benefits of such efforts? Generally, how might management estimate the relative interest elasticity of various deposit liabilities of a bank?

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