Compute value of flower valley company bonds

Assignment Help Risk Management
Reference no: EM131865068

This set of problems is designed to be calculated using the Excel or financial calculator. Do not use financial tables to calculate these problems.

Flower Valley Company bonds have a 13.89 percent coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature 18 years from now. Compute the value of Flower Valley Company bonds if investors’ required rate of return is 9.34 percent.

Round the answer to two decimal places.

Reference no: EM131865068

Questions Cloud

Calculate the yield using geometric average : Using the expectations theory, what is the yield on a 1-year bond 1 year from now? Calculate the yield using a geometric average.
What is the current value of this stock : The last dividend paid by New Technologies was an annual dividend of $1.40 a share. What is the current value of this stock?
What is synthetic option created by this hedge : A consumer of a commodity uses which, a call or a put to protect income? What is the synthetic option created by this hedge.
Contributed to the downfall of enron financial practices : Determine the primary factors that contributed to the downfall of Enron’s financial practices.
Compute value of flower valley company bonds : Compute the value of Flower Valley Company bonds if investors’ required rate of return is 9.34 percent.
What is the synthetic option created by this hedge : A producer of a commodity uses which, a call or a put to protect income? What is the synthetic option created by this hedge?
About the yield to maturity of bond : What is the yield to maturity of a 30-year bond that pays a coupon rate of 7.54 percent per year, has a $1,000 par value, and is currently priced at $855?
What should be the market price of the bond : A bond will pay $10,000 at maturity in 12 years. It also makes semiannual interest payments of $350 until maturity. what should be the market price of the bond?
What is the current price of bond : The bond has a maturity of 26 years and a yield to maturity of 13.23 percent, compounded annually. What is the current price of the bond?

Reviews

Write a Review

Risk Management Questions & Answers

  How might you get a handle on customer reaction to strategy

How might you get a handle on customer reaction to the strategy? What steps should you take before considering whether to roll out this strategy?

  How do sinking funds reduce default risk

What is a trustee? Why do bondholders insist that a trustee be included in all public bond offerings? Why are these less necessary in private debt placements?

  Cpc perpetual bond

Determine the value of a $1,000 CPC perpetual bond with a 4% coupon rate when the required rate of return is 4%? What is its value if the required rate were 5%?

  Evaluate managements role within a financial investment firm

Evaluate management's role within a financial investment firm for establishing proper risk management procedures for high-risk investments.

  How your own ethical discernment

Write a reflective piece on how your own ethical discernment has changed due to what you learned in class.

  What is filer aftertax cost of debt

What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)

  What is the price sensitivity hedge ratio

What is the price sensitivity hedge ratio? How are the price sensitivity and minimum variance hedge ratios alike? How do they differ?

  What are the companys top risks

What are the company's top risks, and what is management doing about it and what size operating or cash loss has management and the board agreed was tolerable?

  What is the rate of return for an investor in the fund

What is net asset value at the start and end of the year? What is the rate of return for an investor in the fund?

  Compute the probability that the peso will devalue=

Assume that if the peso were to depreciate, investors figure it will depreciate by 25%. Compute the probability that the peso will devalue and the probability that there will be a default.

  What does low risk mean for a long horizon investor

What does low risk mean for a long horizon investor? Is the standard deviation of holding returns over some horizon the right way of thinking about risk?

  List several operating strategies for hedging operating risk

List several operating strategies for hedging operating risk. What are the advantages and disadvantages of these hedges compared with financial market hedges?

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