Assume that the yield to maturity remains constant

Assignment Help Financial Management
Reference no: EM13767950

A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095.

a) What is its yield to maturity (YTM)? Round your answer to two decimal places.

b) Assume that the yield to maturity remains constant for the next 4 years. What will the price be 4 years from today? Round your answer to the nearest cent.

Reference no: EM13767950

Questions Cloud

What is the size of the quality spread differential : Firm A and Firm B need to raise $100,000,000 of debt to pay for their projected capital expenditures. Firm A is a blue chip company with a high credit rating in the corporate debt market. It can borrow funds at either 10.75% fixed rate or at LIBOR + ..
Do you think socrates was an atheist : Do you think Socrates was an atheist, as he was charged in court? Why or why not? What is wrong with atheism anyway? Socrates gives several arguments about death not being something that he fears.
Pharmacological companies problem issues : Why don't they want to spend money on making sick people well?
How long did it take for the car to stop from the moment : The following data shows the position (x), the speed (v), and the deceleration (v2) of a car from the moment that driver hit the break until the moment that the car came to a stop. Required: Please utilize an Excel spreadsheet to find the trend of de..
Assume that the yield to maturity remains constant : A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095. What is its yield to maturity (YTM)? Assume that the yield to maturity remains constant for the next 4 years. What will the price be 4 years from today? ..
Summary of the jurisdiction : A summary of the jurisdiction (i.e., city, county, or state) and the portion of the criminal justice system your proposal is designed to address
Annual dividend divided by the current stock price : Next year's annual dividend divided by the current stock price is called the:
Discuss how the philosophy of economist milton friedman : Discuss the legal and ethical issues surrounding Solyndra, the California based solar panel manufacturer. You will need to research the company through the University library.
Expected return on the market : Security I has a beta of 1.3, the risk-free rate is 4%, and the expected return on the market is 11%. What is the expected return for Security I?

Reviews

Write a Review

Financial Management Questions & Answers

  Evaluated projects using the firms average discount rate

A colleague has evaluated projects using the firm's average discount rate, which is the discount rate on the average risk project of the firm. He produced the following report:

  Cause carolina to be indifferent between the two methods

Carolina Vineyards is considering two alternative production methods for turning grapes into wine. One method calls for using a hand-operated press, while the other would employ a new, automated press. It has been estimated that the variable cost per..

  Robertrsquos new way vacuum cleaner company is a newly

robertrsquos new way vacuum cleaner company is a newly started small business that produces vacuum cleaners and belongs

  Interest rates are constant

A 4-year bond with a 6.50% coupon and a 9.50% yield to maturity is currently worth $903.87, how much will it be worth 1 year from now if interest rates are constant?

  Valuing preferred stock

E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 8 percent on this stock, how much should..

  Calculate the relevant cash flow

Depreciation (of existing machinery): $10,000. Calculate the relevant cash flow for this firm for the year 2014.

  Withdraws the entire amount and puts it in a mutual fund

At the end of each quarter, a 30-year-old woman puts $2000 in a retirement account that pays 6% interest compounded quarterly. When she reaches 55, she withdraws the entire amount and puts it in a mutual fund that pays 8.7% interest compounded monthl..

  About the sales increase

Maggie's Muffins, Inc., generated $2,000,000 in sales during 2013, and its year-end total assets were $1,300,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..

  Bond equivalent yield and discount yield

The treasurer of a large corporation wants to invest $36 million in excess short-term cash in a particular money market investment. The prospectus quotes the instrument at a true yield of 4.48 percent; that is, the EAR for this investment is 4.48 per..

  Calculate economic order quantity

An appliance for less is a local appliance store. It costs the store $2.4 per unit annually for storage, insurance act. To hold microwave in their inventory. Sales this year are anticipated to be 632 units. Each order costs $21. The company is using ..

  What is yield to maturity-assume semi annual coupon payments

What is the yield to maturity of a 23 year old bond that pays a coupon rate of 8.25% per year, has $1,000 par value and is currently priced at $1298.05? (Assume semi annual coupon payments)

  Prepare a statement of unrestricted revenues

Prepare a Statement of Activities using the format presented and prepare a Statement of Unrestricted Revenues, Expenses, and Other Changes in Unrestricted Net Assets together with a Statement of Changes in Net assets.

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