User Account

All Pages

Coupon rate of the new issue

Assignment Help Finance Basics
Reference no: EM133119893

HYDRO ONE INC wishes to issue a new series of bonds on the market to finance a major expansion project. The maturity would be 20 years and to establish a competitive coupon rate, we want to offer a yield 20% higher than the yield of the last series of bonds issued. This latter series has a face value of $1,000 and a coupon rate of 6% (paid semi-annually). It was issued on January 5, 2015 with a 30-year maturity on January 5, 2045. The bond is selling as of today, February 15, 2022, at $1,086. What should be the coupon rate (paid semi-annually) of the new issue assuming that the bond can be bought on its date of issue at a discount, ie at the index 98.5? Please present all your calculations

Reference no: EM133119893

Questions Cloud

Determining the federal reserve : Currently a community bank has $45,000 in reserves, demand deposits of $200,000, and loans of $145,000. Shortly, it receives a $50,000 demand deposits and a $25
Le-ond prices and interest hate risk : One year ago, you purchased a 2-year bond with Y'l'M ot 5% and coupon rate of 4% [semiannual payments). Men you are selling it today, you notice that its YTM ha
Bond prices and interest rate risk : Consider a bond that has a coupon of 8% paid annually and has a maturity of 5 years. The bond is currently selling for $1,047.34, which means its YTM is 6.85%.
Calculating the npv and irr on a financial calculator : When calculating the NPV and IRR on a financial calculator (I'm using HP-12C), is the sequence with which you input the payments important?
Coupon rate of the new issue : HYDRO ONE INC wishes to issue a new series of bonds on the market to finance a major expansion project. The maturity would be 20 years and to establish a compet
Evaluation of a capital project : The project is expected to produce sales revenue of $60,000 the first year; this revenue will increase by 5% per year over the next two years.
Most compelling topics : What were the most compelling topics learned in this course? How did participating in discussions help your understanding of the subject matter?
Literature review should be presenting the state : Literature review should be presenting the state of current knowledge in a specific area and as such, should have a narrative that flows from one paragraph
Determine appropriate risk response plan : Assess the impact of events on the project's progress in order to determine an appropriate risk response plan.

Reviews

Write a Review

Finance Basics Questions & Answers

  Provide an overview of the transactions completed

Provide an overview of the transactions completed and Provide an overview of the financial reports generated

  What is the purpose of a firm

1. What is liquidity a measure of? Discuss the potential merits of high liquidity verses low liquidity.

  What unique problems do couples with a wide age gap face

What unique problems do couples with a wide age gap face as they plan for retirement What are some solutions to the situation What should be the investment strategy

  What was blackstone plowback ratio based on affo

Blackstone Properties, a national office REIT, reported GAAP net income of $78,806,000 in 2005. It also reported the following income statement items.

  Find the weights of the two pure factor portfolios

Then write out the factor equations for the two pure factor portfolios, and determine their risk premiums. Assume a risk-free rate that is implied by the factor equations and no arbitrage.

  Compute the monthly installments on the mortgage

You financed the purchase of a $300,000 apartment with a down payment in cash of 20% of the purchase price. The remaining 80% is financed with a mortgage

  What is the npv of expansion

A retail coffee company is planning to open 100 new coffee outlets that are expected to generate, in total, $15 million in free cash ?ows per year, with a growt

  Calculate bb current cash conversion cycle

Calculate BB's current cash conversion cycle. BB currently uses 3,000 ingots of aluminum each year to manufacture bracelet blanks.

  If fred becomes disabled determine which of the following

1. which of the following in addition to current arrangements would generate a taxable gift?a. a gift of14000 from the

  Difference between market return and risk-free rate

Suppose CAPM works, and you know that the expected returns on Google and IBM are estimated to be 12.75% and 9.25%, respectively. You have just calculated

  Spending money to take on a trip to niagara falls

Cheryl wants to have $4,500 in spending money to take on a trip to Niagara Falls in three years.

  What is the required rate of return on your company stock

Assume that the average firm in your company's industry is expected to grow at a constant rate of 7% and that its dividend yield is 5%.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd