Calculate the percentage change in price of bond

Assignment Help Financial Management
Reference no: EM131873292

1. Consider a 3-year coupon bond with a face value of 100 dollars, and a coupon rate of 10%. Suppose the discount rate is 10%, compute the price (ie, present value) of this bond. Suppose the discount rate increases to 12%, calculate the percentage change in price of bond.

2. Consider a 2-year coupon bond with a face value of 100 dollars, and a coupon of 10 dollars. Suppose the market price of the bond is 98 dollars, compute the implied yield to maturity.

Reference no: EM131873292

Questions Cloud

Demonstrate course-related knowledge : Each thread must be three hundred - three hundred fifty words, include at least 2 peer-reviewed sources cited in current APA , and demonstrate course-related.
Describing the project in terms of scope and time : Find any example of a real project with a real project manager. Feel free to use projects in the media (such as the Olympics, television shows, or movies).
Briefly discuss point your assessment of re-launch effort : Briefly discuss point your assessment of the re-launch effort. Describe VW drivers. Describe the Beetle target audience . Explain the Drivers Wanted campaign.
Explain different risk factors in risk management analysis : Financial manager has to consider many different risk factors in risk management analysis of the project.
Calculate the percentage change in price of bond : calculate the percentage change in price of bond. compute the implied yield to maturity.
How you rank four firms in terms of financial performance : Research the four firms using either Key Statistics or Financials from the overview/main pages for the stocks on Yahoo! Finance Web site
Define relationship to explore conflict communication : Choose a significant relationship (personal or professional) to explore conflict communication. Choose 3-4 Units from the course to analyze conflict.
Sale price of the bond-calculate mittbama rate of return : what is the price he would pay for the bond? Given the sale price of the bond, calculate Mittbama's rate of return.
How would you keep the stakeholders happy : There is a common phrase in business: Cash is king. Cash flow is the life-blood of a company. How would you keep the stakeholders happy?

Reviews

Write a Review

Financial Management Questions & Answers

  Was this a good contract for the thrall company to earn

What is the NPV of this Project? Was this a good contract for the Thrall Company to earn? Why or Why not?

  What is the break-even point in dollars

The Poseidon Swin Company produces swim trunks. What is the break-even point in dollars?

  Calculate cost of preferred stock-cost of preferred stock

Assume that today is December? 31, 2012. Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. Calculate the? after-tax cost of debt using both the? bond's yi..

  An individual stocks diversifiable risk

Managers should under no conditions take actions that increase their firm's risk relative to the market, regardless of how much those actions would increase the firm's expected rate of return. An individual stock's diversifiable risk, which is by its..

  Assume perfect capital markets and no taxation

A company's debt is given by a bond that will mature in two years. After two years the company will terminate all activity. The company unlevered equity value in two years can be $17 millions with a 50% probability or $14 millions with probability 50..

  Calculate the effective rate of interest

Assume the $27,872 Treasury bill, 5% for 15 weeks. Calculate the effective rate of interest.

  Relevant nonzero key rate durations for the entire portfolio

Key rate duration I have a portfolio of two fixed rate bonds. Bond A is a 2 year, $100 par value US govt bond, coupon=5% (per annum), payable annually. Bond B is a 4 year, $100 par value US govt bond, coupon=6% (per annum), payable annually. What are..

  What is the current share price-firm needs to plow back

Metallica Bearings, Inc. is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $10 per share dividend in 10 years and will ..

  Make an investment

You want to make an investment that will yield a lump sum of $43,665 in 4 years. You will invest at a nominal rate of 8%. How much do you need to invest today to reach the above future value?

  How large of a sales increase can the company achieve

Charles Morris Builders Corporation (CMBC) generated $2 million in sales during 2015, and its year-end total assets were $1.5 million. Also, at year-end 2015, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of acc..

  How much interest will you end up paying over life of loan

Suppose that you take out a loan for $300000 to purchase a house. You are required to make monthly payments, and the APR is 6%. How much interest will you end up paying over the life of the loan (30 year mortgage)?

  Value corporate bond and annual coupon rate

Last year Janet purchased a $1,000 face value corporate bond with an 11% annual coupon rate and a 25-year maturity.

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