What would be the estimated price of bond today

Assignment Help Corporate Finance
Reference no: EM13214502

Develop and submit a 3-4 page (double-spaced) tutorial of key bond characteristics and terms. Your tutorial should address the major issues in bond valuation. In addition to the main pages of your tutorial, provide solutions to the following example problems. Your tutorials of these example problems should provide a qualitative explanation of the characteristics of the problems and of your valuation solution, as well as implications of the valuation model, such as how various parameters could be investigated more.

Bond Example 1: A zero coupon Treasury bond is scheduled to pay \$1000 in 25 years. If the current Treasury yield rate on this maturity of bonds is 4.5% YTM (APR), what would be the estimated price of this bond today?

Bond Example 2: A corporate bond has a 7.5% annual coupon rate and pays coupons semiannually. The bond has 20 years remaining to maturity and is rated AAA. Bonds of this rating are currently priced to provide a 6.5% YTM. What would be the estimated price of this bond today?

Previous Q& A

Explain columetric flask and the colume made up

3.953g of egg shell was reacteed with 50ml of 0.1 mol/l hcl and shel contains ca2co3 after all the sheell reacted resultign solution was placed in a columetric flask and th colume made up to be 100ml.

How many labor hours and machine hours should firm employ

Davy Metal Company produces brass fittings. Davy's engineers estimate the production function represented below as relevant for their long-run capital-labor decisions. Q = 500L^0.6K^0.8 where Q = annual output measured in pounds.

At which output level avc reaches its minimum value

A firm estimates that its total cost function is accurately estimated by the equation TC = 6,000 + 19Q - 5Q^2 + 0.5 Q^3 a. How much is MC at an output of 10 units b. At which output level AVC reaches its minimum

State the new volume if the pressure remains constant

degrees C are warmed to 100 degrees C. what is the new volume if the pressure remains constant?

How much labor will be hired to minimize costs of producings

Your firm's the production function: Q = 4K^1/2L^1/2 Suppose that the price of labor is \$5 and the price of capital is \$20. Your firm desires to produce 200 units of output. How much labor will be hired to minimize the costs of producing 200 units..

Explain what kind of hybridization for the central at atom

What bond angles do you expect for each of the following, and what kind of hybridization do you expect for the central at atom in each?

How to determine the industrys market structure

Suppose that the market price for a bottle of vitamins is \$2.50 and that at that price the total market quantity demanded is 75,000,000 bottles. How many firms will there be in this industry d.Suppose that, instead, the market quantity demanded at ..

Explain the molecule should only contain only carbon

Draw a six carbon alkyne that can exist as diastereomers. The molecule should only contain only carbon

What profit or loss would the investment banker

What profit or loss would the investment banker incur if the issue sold to the public at an average price of \$25 per share and what profit or loss would the investment banker incur if the issue were sold to the public at an average price of \$15 p..

Explain what would the distribution of peaks look like

Gallium arsenide is a polymeric material, but its mass spectrum shows fragments with formulas GaAs and Ga2As2. What would the distribution of peaks look like for these two fragments?

Similar Q& A

Improve the transparency of superannuation

Outline the salient features of MySuper and explain the various ways in which transparency will be improved

Describe key risk indicators

Key risk indicators act as signals for sound risk management, potentially helping to prevent or prepare for risk exposure.

What is the npv of the opportunity

You have been offered the following investment opportunity: if you invest \$16,000 today, you will receive \$4,000 two years from now, \$7,000 four years from now, and \$9,000 six years from now.

What is each firms return on equity

Which firm had the higher increase in earnings, and why and what is each firm's Return on Equity with the increased sales?

What is the return of investment measured in percentage

What is the return of investment measured in percentage terms and expected return of investment measured in dollar terms if the opportunity cost rate is 10 percent

Primary objective of shareholder wealth maximization

Discuss what other objectives may be important to a public limited company and whether such objectives are consistent with the primary objective of shareholder wealth maximization.

Calculate cost of retained earnings and new common stock

The management of a conservative company has adopted a policy of never letting debt exceed 30% of total financing. The company will earn \$10,000,000 but distribute 40% in dividends,

Average rate of return on your investments

Suppose you are considering for an early retirement, so you decided to invest 5,000 dollar every year, starting at age 27. You plan to stop working when you can accumulate one million dollar.

Find effective annual interest rate

The beta of Microsoft stock is 1.2, where risk free rate of return is 4%. Suppose that the expected return on the market is 16%.

What is the annual ocf for the project

The old board retails for \$21,400. Variable costs are 55 percent of sales, depreciation on the equipment to produce the new board will be \$1,350,000 per year, and fixed costs are \$1,250,000 per year - If the tax rate is 38 percent, what is the annu..

Explain the overall weighted cost of capital

In April 1988, the VP of project finance at the Hilton Company, Christopher Nassetta, was creating recommendations for discount rates that should be used to estimate each of the company's three divisions.

Calculate the sharpe ratio and the entire portfolio

Calculate the Sharpe Ratio of each asset given a T-bill rate of 1.7%  and comment on your results and calculate the Sharpe Ratio the entire portfolio given a T-bill rate of 1.7%  and comment on your results.