Celebrities raise money by issuing bonds to investors

Assignment Help Financial Management

Reference no: EM131354512

With celebrity? bonds, celebrities raise money by issuing bonds to investors. The royalties from sales of the music are used to pay interest and principal on the bonds. In April of? 2009, EMI announced that it intended to securitize its back catalogue with the help of the Bank of Scotland. The bond was issued with a coupon rate of 6.56.5?% and will mature on this day 2121 years from now. The yield on the bond issue is currently 66?%. At what price should this bond trade? today, assuming a face value of ?$1 comma 0001,000 and annual? coupons

Reference no: EM131354512

Questions Cloud

What is equipment after-tax salvage value : Karsted Air Services is now in the final year of a project. The equipment originally cost $23 million, of which 80% has been depreciated. Karsted can sell the used equipment today for $5.75 million, and its tax rate is 35%. What is the equipment's af..

Annual payment will be used to reduce principal balance : Sunrise Coffee just borrowed $160,000 to build a new shop. This mortgage calls for equal annual payments at the end of each year. The loan is for 20 years at an APR of 8.15 percent. How much of the first annual payment will be used to reduce the prin..

What is lower bound for price of this european put option : Consider a four-month European put option on a non-dividend-paying stock when price is $55, the strike price is $60, and the risk-free interest rate is 12% per annume? What is the lower bound for the price of this European put option. you check the m..

Capital budgeting criteria-ethical considerations : An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air ..

Celebrities raise money by issuing bonds to investors : With celebrity? bonds, celebrities raise money by issuing bonds to investors. The royalties from sales of the music are used to pay interest and principal on the bonds. In April of? 2009, EMI announced that it intended to securitize its back catalogu..

What would be the beta of your resulting investment : You have $20000 to invest in the stock market and you want to buy 1000 shares of spurs inc., which is trading at $30 per share and has a beta of 1.3. Assuming that you can buy on margin at the risk free rate from your broker, what would be the beta o..

Expected cash inflows : Project L costs $65,000, its expected cash inflows are $13,000 per year for 6 years, and its WACC is 10%. What is the project's payback?

User Account

All Pages