Calculate the price of coupon bond

Assignment Help Financial Management

Reference no: EM131850744

1. Calculate the price of a 6.5 percent coupon bond with 10 years left to maturity and a market interest rate of 8.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Bond price $

Is this a discount or premium bond?

Discount bond

Premium bond

2. Camper,Inc. is interested in acquiring Baxter Corp. Baxter has 40 million shares outstanding. Its WACC is 9.5% and the risk free rate is 5%. Baxter has $10 million in debt. Baxter's free cash flow is $25 million annually and is expected to grow at a constant rate of 4% per year. Calculate the intrinsic value of Baxter's stock, using the formula Vop = FCF0(1+g)/WACC - g. Based on your calculations, what is the value of Baxter's stock per share?

$11.11

$11.57

$11.82

$14.00

None of the above

Reference no: EM131850744

Questions Cloud

Write an one page paper of your favorite riddle book : Write an one page paper of your favorite riddle book, a description of your memories and feeling connected to the book, why that means a great deal to you.

Discuss about the range of exceptionalities in children : In this course, you have learned about the range of exceptionalities in children from low-incidence disabilities to gifted and talented.

What are causes and effect of drug and alcohol use in minors : What are the causes and/or effects of drug and/or alcohol use in minors (teens)? What are the causes and/or effects teen pregnancy?

Port and listen for new connections : Use the java.net.ServerSocket class to open a port and listen for new connections (see chapter 3 of the textbook for more information).

Calculate the price of coupon bond : Calculate the price of a 6.5 percent coupon bond with 10 years left to maturity and a market interest rate of 8.0 percent.

Discuss the level of infant and child mortality : Include any poverty and education statistics that you find. Are there lessons that can be learned and applied to Saudi Arabia's population?

What is the teleology : What are the three definitions of substance that Aristotle gives? How are they all expressions of the same thing?

Evaluate dantes rank order of sins : Evaluate Dante's rank order of sins. Does his moral hierarchy make sense as you view human behavior today? In what ways do you agree or disagree?

Discuss about the political interests of american citizens : Discuss one effect that the two-party system of the United States has on the political interests of American citizens.

User Account

All Pages