Bond calculations-discount-premium

Assignment Help Finance Basics
Reference no: EM1332352

The initial proceeds per bond, the size of the issue, the initial maturity of the bond, and the years remaining to maturity are shown in the following table for a number of bonds. In each case, the firm is in the 40 percent tax bracket, and the bond has a $1,000 par value.

Bond Proceeds per bond Size of issue Initial maturity of bond Years remaining to maturity
A $ 985 10,000 Bonds 20 years 15 years
B 1,0325 20,000 25 16
C 1,000 22,500 12 9
D 960 5,000 25 15
E 1,035 10,000 30 16

a. Indicate whether each bond was sold at a discount, at a premium, or at its par value.

b. Determine the total discount or premium for each issue.

c. Determine the annual amount of discount or premium amortized for each bond.

d. Calculate the unamortized discount or premium for each bond.

e. Determine the after-tax cash flow from the unamortized discount associated with the retirement now of each of these bonds, using the values developed in part (d).

Reference no: EM1332352

Questions Cloud

Illustrte what is the put premium : Illustrte what is the put premium on a December 25 PHLX pound contract with an exercise price of $1.81.
Drain on medicaid resources : Health Care Management - show alternatives to ease this drain on Medicaid resources and Show alternatives to ease this drain on Medicaid resources
Create a plan for using power and influence : An important aspect of being an effective leader is the impact you create on your followers.  Create a plan for using power and influence to improve your leadership capability.
Make a web page that contains two selection lists : Pick your favorite sport and search the internet for current roster of players for five teams. design a web page that contains two selection lists: one that displays a drop-down menu of team names and the other a multi-line selection list that dis..
Bond calculations-discount-premium : Find out the total discount or premium for each issue. Find out the annual amount of discount or premium amortized for each bond.
Customs to become part of their host nation : To what extent do you think that immigrant families should give up their customs to become part of their host Nation.
Stakeholder analysis and management strategy : Your stakeholders based on their level of authority (power) and their level of concern (interest) regarding the outcome of your project in a Power/Interest Grid.
Find out if they can be formed into a triangle : Write down a JavaScript program that allows a user to input three integers using text boxes in a form. (Hint: You need to use the built-in parseInt function to convert the input strings to integers.) Test the three integers to determine if they ca..
What roles should hr professionals play : What roles should HR professionals play in staffing decisions and How should we determine who should be involved?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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