What is the present value or worth of this bond

Assignment Help Financial Management

Reference no: EM131026234

Assume a $1,000 face value bond has a coupon rate of 8.5 percent paid semiannually and has an eight-year life. If investors are willing to accept a 10 percent rate of return on bonds of similar quality, what is the present value or worth of this bond?

Reference no: EM131026234

Questions Cloud

Capital gains-the tax effect of this transaction : A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent ..

Find the joint probability function for y1 and y2 : Contracts for two construction jobs are randomly assigned to one or more of three firms, A, B, and C. Let Y1 denote the number of contracts assigned to firm A and Y2 the number of contracts assigned to firm B. Recall that each firm can receive 0, ..

What is the future value of his investment cash flows : Chuck Brown will receive from his investment cash flows of $3,155, $3,500, and $3,840 at the end of years 1, 2 and 3 respectively. If he can earn 7.5 percent on any investment that he makes, what is the future value of his investment cash flows at th..

Treasury inflation-protected security with a par value : Compute the annual interest payments and principal amount for a Treasury Inflation-Protected Security with a par value of $1,000 and a 3-percent interest rate if inflation is 4 percent in year 1, 5 percent in year 2, and 6 percent in year 3.

What is the present value or worth of this bond : Assume a $1,000 face value bond has a coupon rate of 8.5 percent paid semiannually and has an eight-year life. If investors are willing to accept a 10 percent rate of return on bonds of similar quality, what is the present value or worth of this bond..

What is output per unit of capital : If the value of A is 10, and there are 100 units of K and 400 units of labor, what is the value of output equal to in this economy? Show your work. Given the values in part (a), what is output per worker? Given the values in part (a), what is outp..

What will be the value of the investment in two years : Your brother has asked you to help him with choosing an investment. He has $6,000 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0400 annually with the interest being paid quarterly. What will be the..

Compute numbers and explicate five different possibilities : We receive a $400,000 mortgage from the bank for 30 years. A VP at the bank, tells us to fully amortize the mortgage we need to pay $5,000 monthly. First, we would like to know how much the yearly mortgage rate the bank charges us. Fifth, the VP of t..

Record the entries for the purchase of the net assets : Record the entries for the purchase of the net assets of Eagle by Mans (statutory merger) at the following cash prices:

User Account

All Pages