User Account

All Pages

What is the realized return on your investment

Assignment Help Corporate Finance
Reference no: EM13205165

You buy a very risky bond that promises a 9.5% coupon and return of the $1,000 principal in 10 years. You pay only $500 for the bond.

A. You receive the coupon payments for three years and the bond defaults. After liquidating the firm. The bondholders receive a distribution of $150 per bond at the end of 3.5 years. What is the realized return on your investment?

B. The firm does far better than expected and bondholders receive all of the promised interest and principal payments. What is the realized return on your investment?

Reference no: EM13205165

Questions Cloud

What is the maximum loan that the bank could extend : Suppose that the reserve requirement is 10 percent and the balance sheet of the People's National Bank looks like the accompanying example. • What are the required reserves of People's National Bank  Does the bank have any excess reserves
State what is the ph of solution of perchloric acid : What is the pH when 50.0mL of a 0.53M solution of CH3NH2 is titrated with 17.70mL of a 0.37M soltion of perchloric acid?
Describe the details of the fictitious business : Assume you have been hired as a managing consultant by a company to offer some advice that will help it make a decision as to whether it should shut down completely or continue its operations. It currently uses 100 workers to produce 6,000 units o..
State volumetric flask and diluting to the calibration mark : A buffer solution is prepared by placing 5.86 grams of sodium nitrite and 32.6 mL of a 4.90 M nitrous acid solution into a 500.0 mL volumetric flask and diluting to the calibration mark
What is the realized return on your investment : You receive the coupon payments for three years and the bond defaults. After liquidating the firm. The bondholders receive a distribution of $150 per bond at the end of 3.5 years. What is the realized return on your investment?
What is the marginal cost of the last unit : The daily wage (per worker) is $70, and the price of the firm's output is $32. The cost of other variable inputs is $2,000 per day. You are told that the firm's fixed cost is "high enough" so that the firm's total costs exceed its total revenue.
Calculate the amount of profit : Explain how this leader in your firmcan speculate on the belief that the euro will be $1.41 in 12 months and calculate the amount of profit that can be earned and the percentage return achieved.
State solution beginning with solid ammonium phosphate : prepare 250.00 mL of 0.150 M ammonium ion solution beginning with solid ammonium phosphate, (NH4)3 PO4.
Why should purchase the extended warranty : Automobile companies often provide a 3-year warranty on new vehicles. Consumers must pay for extended warranties beyond the manufacturer's warranty period. Suppose that a 5-year extended warranty is offered for your new vehicle at a price of $1,31..

Reviews

Write a Review

Corporate Finance Questions & Answers

  Calculate the total cost of a loan

Suppose you are planning buying a used piano. $600 is the cash price of the piano. The firm selling the piano is willing to sell it to you for $50 down plus twelve monthly payments of $50.

  Create income statement for the current month

Regal Flair Enterprises has two product lines: jewellery & women's apparel. Cost & revenue data for every product line for current month are as follows;

  Total real rate of return on investment

What was your total nominal rate of return on this investment over the past year and what was your total real rate of return on this investment?

  Find an article on internet involving annuities

Find an article on internet involving annuities to find interesting and informative. Present this article and describe why you select the example.

  Calculation yield to maturity and yield to call

Time value of money involves calculation yield to maturity and yield to call - Eddie's Bar and Restaurant Supplies expects its revenues and payments for the first part of the year

  Explain and discuss stages in a financial crisis

Explain and discuss three stages found within a financial crisis for the United States?

  What is the payback period for project

Find the Weighted Average Cost of Capital and if Google wanted to lower their WACC, what could they do

  Financial and non-financial returns on investment

Describe methods of analysis all organizations commonly use to make financial decisions, including at least two methods used to analyze capital investment decisions and at least one method used to make special decisions

  Effective annual percentage cost of funds

What would be the effective annual percentage cost of funds raised by this action and One way of getting the needed funds would be to forgo the discount, and the firm's owner believes she could delay payment to 40 days without adverse effects

  Evaluate the value of the cash flow

Evaluate the value of the cash flow savings expected to be generated by this project and based solely on one criterion set by the management, should the firm undertake the specific project? Explain.

  Demonstrate the essence of cost of debt and equity

You agree to prepare a PowerPoint presentation of approximately 6 minutes using the examples and information and jones Industries borrows $600,000 for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)?

  Calculation of cost of preferred stock and cost of debt

Calculation of cost of preferred stock, cost of debt, and cost of issuing new stock -  The financial motives for merger.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd