What should be the price of removalists of junk bond

Assignment Help Financial Accounting
Reference no: EM132653259

Removalists of Junk Inc. is issuing a new thirteen-year bond at a face value of $1000 with a coupon rate of 18.0%. Coupons are semi-annual. The risk free yield to maturity on similar term bonds trading in the market is 1.8% and Removalists of Junk has a credit spread of 7.1%.

Problem 1: What should be the price of Removalists of Junk's bond?

The annuity table provided below will assist with calculations:

r=0.9% r=1.8% r=2.65% r=3.05% r=4.45% r=5.3% r=7.1% r=8.9%
n=13 12.2166 11.4994 10.877 10.601 9.7125 9.2262 8.3105 7.527
26 23.0889 20.6186 18.6188 17.7744 15.2272 13.9409 11.7174 10.0117

Reference no: EM132653259

Questions Cloud

What is the maximum price per share nick fury should pay : 2 million shares of stock outstanding and $20 million in debt outstanding. What is the maximum price per share Nick Fury should pay for SLEE Enterprises?
Laws legalizing marijuana in some form : Twenty-three states and the District of Columbia currently have laws legalizing marijuana in some form.
Explain the role and function of central banks : Briefly explain the role and function of central banks. how evenly and nations wealth is shared or distributed among and nations citizens.
How much responsibility should public schools take : In your opinion how much responsibility should public schools take for the health of their students? Would you consider that public schools with a fairly.
What should be the price of removalists of junk bond : What should be the price of Removalists of Junk's bond? Removalists of Junk Inc. is issuing a new thirteen-year bond at a face value
How the goals of our organization affect selection process : During the second week of your internship, the CIO approaches your team and says, "I need you to prepare a briefing on the process of selecting.
Fair elections contribute to democratic governance : Democratic governance is as much concerned with process as it is with outcomes, democratic processes such as fair elections contribute to democratic governance.
What is the price per face value of a two-year : Maturity (years), What is the price per $100 face value of a two-year, zero-coupon, risk-free bond? (Round to the nearest cent.)
Evaluating the effectiveness of the technology : Write a 500 to 700-word summary describing the privacy risks, security safeguards, and strategies for evaluating the effectiveness of the technology selected.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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