What will happen to the price of the bond

Assignment Help Financial Management
Reference no: EM13729249

A $1000 bond with a coupon rate of 5.4% paid semi-annually has five years to maturity and a yield to maturity of 7.5%. If interest rates rise and the yield to maturity increases to 7.8% what will happen to the price of the bond?

Reference no: EM13729249

Questions Cloud

After-tax cash flows for the next ten years : A large cow barn will cost $150,000 to build today and you figure it will add $18,000 per year to your after-tax cash flows for the next ten years. If the salvage value of the building is 50% after ten years and the cost of capital is 7%, what is the..
How the product or service will meet consumer needs : Determine how the product or service will meet consumer needs. You will consider how your new business initiative will affect operations in your company
What is the IRR of the investment : A large cow barn will cost $150,000 to build today and you figure it will add $18,000 per year to your after-tax cash flows for the next ten years. If the salvage value of the building is 50% after ten years and the cost of capital is 7%, what is the..
Calculate the payback period for a combine purchased : Calculate the payback period for a combine purchased for $250,000 if it adds an estimated $40,000 to your net cash flows in harvesting expense savings for the next 4 years, $30,000 per year for years 5 through 8, and has a salvage value of $20,000 at..
What will happen to the price of the bond : A $1000 bond with a coupon rate of 5.4% paid semi-annually has five years to maturity and a yield to maturity of 7.5%. If interest rates rise and the yield to maturity increases to 7.8% what will happen to the price of the bond?
What is valences share price : Valence Electronics has 217 million shares outstanding. It expects earnings at the end of the year of $760 million. Valence pays out 40% of its earnings in total 15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are e..
Describe the influence a manager has on the team dynamic : Describe the influence a manager has on the team dynamic, Describe some reasons why a company might decide to stop outsourcing
What is the RNOA : Before going into year-end closing a company has operating income of $40,000 with a marginal tax rate of 25%. Operating assets are $500,000 and operating liabilities are $200,000. What is the RNOA?
Retirement fund : You want to earn the equivalent of $3500 per month over the expected 25 years of your retirement. You plan to retire in 40 years and can earn 12% on your savings till retirement and 8% on the retirement fund once you retire. How much will you have to..

Reviews

Write a Review

Financial Management Questions & Answers

  Create a powerpoint presentation to demonstrate your

create a powerpoint presentation to demonstrate your understanding of the topic below. use the slide notes function to

  What is the present value per year

What is the present value of $1,100 per year, at a discount rate of 10 percent if the first payment is received 6 years from now and the last payment is received 30 years from now?

  If we want to get some idea about an over time between two

1 which of the statements below is false?a if you invest money for a short period and buy a six-month cd you will not

  Q the issued capital of indiana ltdcomprises of 100000

q the issued capital of indiana ltd.comprises of 100000 ordinary shares of rs. 100 each. it has no fixed interest

  Determine the outstanding loan balance

Find the unknowns in Big Chuck's abbreviated cash budget and determine the outstanding loan balance as of September 30, after any repayments have been made.

  What is the lowest effective annual rate of interest

What is the lowest effective annual rate of interest (EAR) you would have to earn on your investment in order to accomplish your goal? Assuming that interest is compounded quarterly, what is the Annual Percentage Rate (APR) that you would need to ear..

  Explain the emergency fund goals

How long would it take her to achieve the emergency fund goal above if she currently has $18,500 saved, invests $300 per month, and earns an annual percentage yield or APY of 4.25% after taxes in her money market mutual fund.

  Prepare a line graph

Prepare a line graph showing the budgeted total revenues and total expenditures

  Determine the current value of the bond

Determine the current value of the bond if present market conditions justify a 14 percent required rate of return.

  Compute the book value-liquidation value-replacement value

We know the following about Radice. Total assets are $120m, D is $40m, E is $60m, preferred stock of $20m, cash is $10m and the # of shares is 1m. We estimate that the market value of equity is 3 times the book value of it. Finally, a fire sale of th..

  An analysis of the financial issue

An analysis of the financial issue and a comparison with the theory studied in class. Consider how financial theory applies/ doesn't apply/ partially applies to the article and comment on the similarities and discrepancies.

  Explain the default risk and liquidity premiums for bonds

The default risk and liquidity premiums for this company's bonds total 0.9 percent and are believed to be the same for all bonds issued by this company. If the average inflation rate is expected to be 5 percent for years 5, 6, and 7, what is the y..

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