At what price would these bonds sell in the marketplace

Assignment Help Financial Management

Reference no: EM132004240

Kintel, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a face value of $1,000. The company’s investment banker states that investors would use an 8.92 percent discount rate to value such bonds. Assume semiannual coupon payments.

At what price would these bonds sell in the marketplace? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and Bond price to 2 decimal places, e.g. 15.25)

How many bonds would the firm have to issue to raise $1 million? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and number of bonds to 0 decimal places, e.g. 5,275.)

Reference no: EM132004240

Questions Cloud

How much are you willing to pay for one share of stock : How much are you willing to pay for one share of stock if the company just paid an $1.00 annual dividend, the growth rate of dividends is 5% annually.

What is my expected real rate of return : Mulligan, Inc. has $1,000 face-value, 8% coupon bonds outstanding with ten years to maturity. The bonds make annual coupon payments and currently sell.

Discuss the establishment of a post-war us : In many ways Holden Caufield represents a growing discontent with 1950 America's "culture of conformity." How is this so?

What is the effective annual yield : What is the effective annual yield?

At what price would these bonds sell in the marketplace : At what price would these bonds sell in the marketplace? How many bonds would the firm have to issue to raise $1 million?

How much should you pay for a bond : How much should you pay for a bond that has a $1,000 par value, stated interest rate of 5% annually, and that matures in 8 years? The bond pays semi-annual.

Nanotech pay to buy back its current outstanding bonds : If it can refinance at 10.07 percent, how much will Nanotech pay to buy back its current outstanding bonds?

How did the revolution affect the status of women : The Great Awakening The coming of Independence and what marked the moved toward American independence .

Perform administrative closure for the project : MGT113 - BPC110 – Media Culture - Learning outcome - Critically assess and review a project outcome and processes - Write what activities you will do to perform

User Account

All Pages