Assume a required rate of return on bond

Assignment Help Financial Management
Reference no: EM131309641

What is the value of a bond that has a par value of $1,000, a coupon rate of 11.79 percent (paid annually), and that matures in 18 years? Assume a required rate of return on this bond is 9.06 percent round answer two decimals

Reference no: EM131309641

Questions Cloud

Assume credit terms offered to your firm by your suppliers : Assume the credit terms offered to your firm by your suppliers are 3.4/6, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30. The effective annual cost of the trade credit is (Round to two decima..
Positively correlated with the economy : Assume a company, correlated with the economy, is evaluating six projects of which two are positively correlated with the economy, two are negatively correlated, and two are not correlated with it as all. Which two projects would it select to minimiz..
Cash from a donor who temporarily restricted its use : The clinic incurred $4,500,000 in general expenses and paid cash for them. The hospital received $1,000,000 in cash from a donor who temporarily restricted its use.
What is the stock price after the recap : Lee Manufacturing's value of operations is equal to $960.00 million after a recapitalization (the firm had no debt before the recap). Lee raised $244.00 million in new debt and used this to buy back stock. Lee had no short-term investments before or ..
Assume a required rate of return on bond : What is the value of a bond that has a par value of $1,000, a coupon rate of 11.79 percent (paid annually), and that matures in 18 years? Assume a required rate of return on this bond is 9.06 percent round answer two decimals
Economic order quantity model : Cheeseburger and Taco Company purchases 16,205 boxes of cheese each year. It costs $28 to place and ship each order and $5.73 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What is t..
About the economist concept of the time value of money : Suppose your brother or sister owed you $500.00. Thinking about the economist's concept of the time value of money. Would you rather have this money repaid to you right away, in one payment, or spread out over a year in four installment payments? Wou..
Economic order quantity model in placing the orders : Cheeseburger and Taco Company purchases 15,178 boxes of cheese each year. It costs $28 to place and ship each order and $3.35 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. Calculate..
Ebit indifference level associated with two financing plans : EBIT-EPS Analysis) Abe Forrester and three of his friends from college have interested a group of venture capitalists in backing their business idea. The proposed operation would consist of a series of retail outlets to distribute and service a full ..

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare a new contribution format income statement

Miller Company’s most recent contribution format income statement-The number of units sold increases by 13%. The selling price decreases by $1.50 per unit, and the number of units sold increases by 23%. The selling price increases by $1.50 per unit, ..

  The savings are considered to be a benefit to the people

A project will have an initial cost of $1 million and an upgrade cost of $300,000 in year five. The annual operating costs are expected to be $100,000. The savings are valued at $200,000 in years one through four, and $50,000 each year thereafter thr..

  Firms current unlevered value

Suppose that your firm's current unlevered value is $800,000, and its marginal corporate tax rate is 35%. Also, you model the firms PV of financial distress as a function of its debt ratio according to the relation: PV of financial distress=800,000 x..

  What is the payback period for each project

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 347,000 –$ 49,500 1 48,000 24,300 2 68,000 22,300 3 68,000 19,800 4 443,000 14,900 which ever project you choose, if any, you require a 15 percent return on..

  What is net present value of project with cash flows

What is the net present value of a project with the following cash flows if the discount rate is 15 percent?

  Revenues generated by a new fad product are forecast

Revenues generated by a new fad product are forecast as follows: Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 10% of revenues the following year. The product requires an immediate investment..

  About the stockbrokers

Stockbrokers: a. Do not act as middlemen b. Cannot trade stock c. Charge commission for buying and selling d. Are always right in all their stock recommendations e. None of these

  Calculate net working capital

You are evaluating the balance sheet for Goodman's Bees Corporation. From the balance sheet you find the following balances: cash and marketable securities = $850,000, accounts receivable = $1,700,000, inventory = $2,200,000, accrued wages and taxes ..

  How do they earn their return on equity

Different companies have different financial ratios. So Return on Equity for any one company is the product of three ratios which may be quite different in value than the same three ratios for a different company.

  Calculate your total profit from triangular arbitrage

You observe the following three exchange rates at which you can buy or sell (borrow or lend). Calculate your total profit from triangular arbitrage, reporting your total profit in $ (by first calculating the profit in British pounds and then converti..

  Compute the expected share price at the end of year

Suppose the dividends for the Seger Corporation over the past six years were $3.08, $3.16, $3.25, $3.33, $3.43, and $3.48, respectively. Compute the expected share price at the end of 2014 using the perpetual growth method. Assume the market risk pre..

  New supermarkets is major capital budgeting project

Opening a series of new supermarkets is a major capital budgeting project for the company. Describe and discuss the main items on the income statement and balance sheet that you think will be impacted by this new undertaking. Explain why you chose th..

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