User Account

All Pages

Calculate the value of the bond

Assignment Help Accounting Basics
Reference no: EM132508659

Question - PU Corporation bonds pay $110 in annual interest, with a $1,000 par value. The bonds mature in 20 years. Your required rate of return is 9 percent.

a. Calculate the value of the bond.

b. How does the value change if your required rate of return (k) increases to 12 percent?

c. How does the value change if your required rate of return (k) decreases to 6 percent?

Reference no: EM132508659

Questions Cloud

Define the term earnings per share : Define the term 'earnings per share' as it applies to a corporation with a capitalization structure composed of only 1 class of ordinary shares.
The traditional view of leaders : The traditional view of leaders "as special people who set the direction, make the key decisions, and energize the troops" is deeply rooted in individualistic
What part of christina sommers analysis you find convincing : What part of Christina Sommers' analysis and proposal you find convincing, if any, and what part of it, if any, do you find questionable?
How should richmond co account for conversion of bonds : How should Richmond Co. account for the conversion of the bonds into ordinary shares under the book value method? Discuss the rationale for this method.
Calculate the value of the bond : PU Corporation bonds pay $110 in annual interest, with a $1,000 par value. The bonds mature in 20 years. Calculate the value of the bond
What would you do if victim was clothed subsequent to death : Using the same scenario as in question 2, what would you do if the victim was clothed subsequent to death. Explain how the medical examiner or criminalist.
What amount of total assets will appear in the consolidated : What amount of total assets will appear in the consolidated balance sheet prepared immediately after the business combination?
Determine the difference in allocation : Compute the overhead rate using the traditional (plant wide) approach. Determine the difference in allocation between the two approaches
Capital expenditure decisions : Mergers and acquisitions are capital budgeting techniques. This technique is a managerial expansion decision to increase assets drawing a cash benefit

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd