Reference no: EM131045120
Yield to call
Seven years ago the Singleton Company issued 27-year bonds with a 11% annual coupon rate at their $1,000 par value. The bonds had a 5% call premium, with 5 years of call protection. Today Singleton called the bonds.
Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places.
%
Explain why the investor should or should not be happy that Singleton called them.
Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YTM. If investors wish to reinvest their interest receipts, they can now do so at higher interest rates.
Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YTM. If investors wish to reinvest their interest receipts, they must do so at lower interest rates.
Since the bonds have been called, investors will receive a call premium and can declare a capital gain on their tax returns.
Since the bonds have been called, investors will no longer need to consider reinvestment rate risk.
Since the bonds have been called, interest rates must have fallen sufficiently such that the YTC is less than the YTM. If investors wish to reinvest their interest receipts, they must do so at lower interest rates
|
Reliability of some new fiber optic cables
: A computer network manager wants to test the reliability of some new fiber optic cables that the department just received. The department received 4 boxes, each containing 30 cables.
|
|
What is the days sales outstanding
: Snider Industries sells on terms of 3/10, net 30. Total sales for the year are $1,183,000. Thirty percent of the customers pay on the 10th day and take discounts; the other 70% pay, on average, 88 days after their purchases. What is the days sales ou..
|
|
What products or services does compsis provide
: What does Compsis do? What products/services does Compsis provide? How does Compsis make money (who are the customers)? Evaluate strengths, weaknesses, opportunities, and threats (SWOT) of Compsis.
|
|
Is this a significant improvement
: Is this a significant improvement? What other classes would you add to the effort multipliers listed in Appendix 7A to improve the capability and accuracy?
|
|
Compute the realized rate of return for an investor
: Seven years ago the Singleton Company issued 27-year bonds with a 11% annual coupon rate at their $1,000 par value. The bonds had a 5% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of retur..
|
|
Estimate of the true melting point of lead
: The sample mean and sample standard deviation of these measurements were (in degrees centigrade) 330.2 and 15.4, respectively. Construct a 95 percent confidence interval estimate of the true melting point of lead
|
|
Provisions of the securities exchange act
: Bigelow Corporation has total assets of $850,000, sales of $1,350,000, and one class of common stock with 375 shareholders, and a class of preferred stock with 250 shareholders, both of which are traded over the counter.
|
|
Statistical summary and article critique
: Your paper should in 500- 600 words 1) summarize the statistical methods that the researchers used in their article and 2) evaluate those statistical methods. Were the techniques they picked (correlation, hypothesis testing, regression, for exampl..
|
|
What is the effective annual interest rate of trade credit
: The D.J. Masson Corporation needs to raise $300,000 for 1 year to supply working capital to a new store. Masson buys from its suppliers on terms of 1/10, net 90, and it currently pays on the 10th day and takes discounts. What is the effective annual ..
|