Coupon rate and the market rate are equal

Assignment Help Operation Management
Reference no: EM13942264

Find the current price of a bond with the following characteristics: (a) NPER 20, (b) Coupon Rate $60, and (c) Market Rate of Interest 5%.Is the bond in question (1) selling at: (a) Par Value, (b) a Discount to Par, or (c) a Premium to Par? The bond is selling at premium to par because the coupon rate ($60 / $1,000 = 6%) is higher than the market rate. To determine whether a bond will be issued at par, discount or premium without computation, just compare the coupon rate and the market rate (or yield to maturity):

1) if the coupon rate and the market rate are equal, the bond will be issued at par.
2) if the coupon rate is higher than the market rate , the bond will be issued at premium.
3) if the coupon rate is less than the market rate , the bond will be issued at discount. 

Reference no: EM13942264

Questions Cloud

What are the main challenges to the change of mindset : What are the main challenges to the change of mindset required to extend BI tools beyond mere reporting? What can companies do to overcome them? Use examples from the case to illustrate your answer?
Algorithm for evaluating postfix expressions : Should you find it convenient, you may also assume that X1 is the first character on the line, and that each Xi is separated from the next by exactly one space
Balance sheet equation : balance sheet equation format to show the effect
Calculate the standard error for the predicted gpa : A researcher wants to predict graduate-school grade point average (GPA) from GRE verbal scores (which is what the pesky GRE is supposed to do, anyway!). She gathers data on fifty graduate students. Below are the data "high points":
Coupon rate and the market rate are equal : if the coupon rate and the market rate are equal, the bond will be issued at par.  if the coupon rate is less than the market rate , the bond will be issued at discount.
How training practices could be improved : Provide appropriate recommendations to the Director of the chosen organisation as to how those training practices could be improved and what the benefits would be to the company by improving them.
What temperature will be shown by infrared imaging system : What temperature will be indicated by the infrared imaging system as it is used to view the aluminum billet through a 6-mm-thick fused quartz window and what temperature will be indicated by the infrared imaging system when it is used to view the ..
What are the two essay development techniques : When one part of a paragraph or body does not match with the rest, the result is what? In an essay about a short story or novel, what should your introduction include?
Pay for the stock if the required rate of return on stock : You are approached about purchasing a share of common stock in a company that will definitely go out of business exactly 2 years from today. The company is anticipated to pay a $10 dividend one year from now and a $15 divined two years from now (imme..

Reviews

Write a Review

Operation Management Questions & Answers

  Quality management

Describe the process that you plan to use to conduct research, identify findings, and develop the Comprehensive Project on "Hotel Escargot" scenario.

  Can you think of practical application of euler circuit

One application of an Euler circuit is the well-known postman problem. A postman (pedestrian) must deliver mail to every house along certain designated streets. So it is necessary, in his postal circuit, that he traverse each street at least once. Ca..

  Future of multinational enterprises

What are your thoughts about the future of Multinational Enterprises (MNEs). You may rely on current events, other readings, and a YouTube video you have identified to establish an informed opinion on the subject.

  Describe an approach to a business diversity program

Describe an approach to a business diversity program that would pragmatic and ethical.

  Property to expand their footprint

Your company owns a piece of land and is in the middle of purchasing this property to expand their footprint in the community. At the last minute

  Define instantaneous monitoring

In regards to hazardous chemicals , define instantaneous monitoring, integrated monitoring, personal monitoring, and area monitoring, and explain the differences among each one. Provide a scenario in which in each method would be used.

  Producer of bandages and arm slings

Susan Williams has been the production manager of Medical Supplies, Inc. for the past 17 years. Medical Supplies Inc. is a producer of bandages and arm slings. During the past 5 y ears, the demand for No-Stick bandages has been fairly constant.

  Discuss the common sources of risk on information technology

Discuss the common sources of risk on information technology projects and suggestions for managing them. Which suggestions do you find most useful?

  Describe main parts of operations planning control system

What are the five main parts of the operations planning control (OPC) system? Why are they important to a functioning OPC system?

  What is slack and why is it important

What is "slack" and why is it important. Why is activity-on-arrow (AOA) or activity-on-node (AON) of significant value to the project manager

  Why would a firm regularly choose to be a second mover

Why would a firm regularly choose to be a second mover? Likewise, why would a firm purposefully be a late mover?

  Provide a detailed analysis of the situation in your busines

a request has been made of you to provide a description of each model and an explanation of why partnering with these companies would or would not create a conflict within your operations. Provide a detailed analysis of the situation in your busin..

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