Assuming yield to maturity remains constant

Assignment Help Financial Management
Reference no: EM131992599

Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7.9% (annual payments). The yield to maturity on this bond when it was issued was 6.1%.

Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment?

Reference no: EM131992599

Questions Cloud

Bodacious bean burners hickory honey or beantastic burner : Atomic Blaster Bean Company is considering the purchase of one of bodacious bean burners “Hickory Honey” or “Beantastic burner.”
What is the additional required investment in inventory : ABC Corp is considering an ‘easing’ of credit policy to expand sales. What is the additional required investment in Inventory?
Andrew industries maintains the a rating for bond issue : What is the price of the bond if Andrew Industries maintains the A rating for the bond issue? What will be the price of the bond if it is downgraded?
What is this type of discount called : The end result is essentially reducing the price by $100. What is this type of discount called?
Assuming yield to maturity remains constant : Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment?
Learn in finance as you move forward with studies-career : How might you use the knowledge that you acquired, learn in finance as you move forward with your studies/career?
What is the bond coupon rate and bond yield to maturity : What is the bond's coupon rate? What is the bond's yield to maturity? (expressed as an APR with semiannual compounding)?
Comparing financial analysis applications used with wacc : Financing working capital expansions, and evaluate WACC methods comparing other financial analysis applications used with WACC.
Regional pizza restaurant chain : Assume you have just been hired as a business manager of Pizza Palace, a regional pizza restaurant chain.

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the weighted average cost of capital for company

Calculate the weighted average cost of capital for Toronto Skaters Company.

  What is the contribution margin per unit sold

If the selling price is $22.80 per unit, what is the contribution margin per unit sold?

  Bond has coupon rate of yield-to-maturity

Bond A has a coupon rate of 15 percent, a yield-to-maturity of 14.78 percent, and a face value of 1,000 dollars; matures in 12 years;

  An electrical utility is experiencing sharp power demand

An electrical utility is experiencing a sharp power demand that continues to grow at a high rate in a certain local area.

  How low can off-star price fall before you get margin call

Suppose that Off-Star currently is selling at $60 per share. how low can Off-Star's price fall before you get a margin call?

  What is the fair price of product

Allstate Corporation, a publicly traded insurance company, currently offers an annuity product for prospective retirees. what is the fair price of this product?

  What is the bond yield to maturity

If the bond's yield to maturity changes to 9.1 % APR, what will be the bond's price? What is the bond's yield to maturity?.

  What is yield to maturity of the par bond

What is the yield to maturity of the par bond? If you expect rates to fall substantially in the next two years, which bond would you prefer to hold?

  Maintenance margin and the intial margin

What is the difference between the maintenance margin and the intial margin? Does the trader ever have to worry about intial margin after the intial date of the contract? Explain.

  What is the firms cost of equity-expected annual dividend

The Cracker Barrel has a beta of 0.98, a dividend growth rate of 3.2 percent, a stock price of $33 a share, and an expected annual dividend of $1.06 per share next year. The market rate of return is 11.2 percent and the risk-free rate is 3.7 percent...

  What is the required rate of return for this stock

The current value of this stock is $13. What is the required rate of return for this stock?

  What does this do to the attractiveness of the mba degree

What does this do to the attractiveness of the MBA degree?

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