Calculate the value of the bond

Assignment Help Accounting Basics
Reference no: EM133156388

Question - You own a bond with a par value of $1000 that pays a $100 annual coupon. The bond matures in 15 years. Your required rate of return is 12% p.a.

(a) Calculate the value of the bond.

(b) How does the value of the bond change if your required rate of return (i) increases to 15% p.a. or (ii) decreases to 8% p.a.?

(c) Assume that the bond matured in 5 years instead of 15 years. Re-compute your answers in part (b).

Reference no: EM133156388

Questions Cloud

Investigation of identity of cltx membrane : Investigation of identity of Cltx membrane binding partner in MDA MB-231 and U251-MG cancer cell lines
Areas of the report that need improvement : Clarify the students understanding of the Part A task. Each student will be asked to assess an Assessment 3 - Part A produced by of one of their peers
Identify the strengths of the report : Identify the strengths of the report - Build your career in a highly engaged and successful team
Determine the total current assets at December : The only liabilities not listed are $37,000 notes payable due in two years. Determine the total current assets at December 31, 2021
Calculate the value of the bond : You own a bond with a par value of $1000 that pays a $100 annual coupon. The bond matures in 15 years. Calculate the value of the bond
Create two objects of each room type : Create is a Hotel Management System (HMS). The HMS is a tool used by a hotel that manages rooms, amenities and their bookings by customer
What is non-controlling interest share of Camia net income : Rosas Corporation acquired a 70% interest in Camia Co. for 2015. What is the non-controlling interest share of Camia's net income for 2015
What is the exchange rate on December : B Company acquired a computer for 100,000 USD when the exchange rate is 1 peso into 20 USD. What is the exchange rate on December
Prepare annual adjusting entry for depreciation at December : Depreciation for the year is estimated to be $3,600. Prepare the annual adjusting entry for depreciation at December 31

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much cash must be invested by hinkle

Wiles invests cash of Php20,000, How much cash must be invested by Hinkle so that the two partners have equal balances in their capital accounts?

  What amount of rental revenue should TINY record

During 2019, TINY received P8,000,000 cash from tenants. What amount of rental revenue should TINY record for 2019

  Construct an argument drawing on one of the short stories

Construct an argument drawing on one (or two) of the short stories we have read by Irving, Hawthorne, or Poe. How does the writer exhibit social responsibility?

  Depreciation temporary differences

Information for Kent Corp for the year 2013: Reconciliation of pretax accounting income and taxable income:

  How much is recognized as grant income for the year

The fair value of the land is currently Php 120,000,000. How much is recognized as grant income for the year ended December 31, 2020?

  Calculate the justified values of trailing P-E

The market P/E, P/B and P/S are 29.4, 8.2 and 2.7. Assuming that there is a 5% grow in dividends and earnings, calculate the justified values of trailing P/E

  What was demo cos total net income for the year

Ator Co. invested $1,000,000 in Demo Co. for 25% of its outstanding stock. What was Demo Co.'s total net income for the year

  What louie and kyo respectively would receive

The first sale of other assets having book value of P300,000 realized P150,000 and available cash is distributed, Pam, Louie and Kyo respectively would receive

  Discuss statement related to corporate

State whether you agree or disagree with the following statement and provide support for your argument: "The corporate charter, bylaws and preferred stock.

  How much is the provision on December

The entity's legal counsel believed it is probable that Minorka will pay the complainant between 2,000,000 and 5,000,000. How much is the provision on December

  Determine the ending inventory

Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost)

  Choose three of the tax credit amounts available on the td

Choose three of the tax credit amounts available on the TD1 (except the basic personal amount) and explain who might claim these tax credits

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