Determine the price of the bond if required rate of return

Assignment Help Financial Management
Reference no: EM131355216

Alpha Corporation has a bond issue with an annual coupon rate of 10% and 1 year remaining until maturity. The par value of the bond is $1,000. Determine the price of the bond if the required rate of return is 8% and the bond pays interest semi-annually.

Reference no: EM131355216

Questions Cloud

The required rate of return on sigma corporation : Suppose the risk-free rate is 8%, the required rate of return on the stock market is 13% and the beta of the stock of Sigma Corporation is 1.1. Calculate the required rate of return on Sigma Corporation.
What is the beta of the portfolio : Suppose that you are the money manager of the following fund: a $1.5mln investment in Dell, a $1mln investment in IBM, and a $0.5mln investment in Microsoft. If the beta of Dell is estimated to be 0.5, the beta of IBM is estimated to be 1.0 and the b..
Determine the yield to maturity if the price of the bond : Gamma Corporation has a bond issue with an annual coupon rate of 5% and 3 years remaining until maturity. The par value of the bond is $1,000 and interest is paid annually. Determine the yield to maturity if the price of the bond is $1,000.
What is the firm cost of capital for the preferred stock : (Cost of preferred stock) The preferred stock of Walter Industries Inc. currently sells for $35.67 a share and pays $2.49 in dividends annually. What is the firm's cost of capital for the preferred stock?
Determine the price of the bond if required rate of return : Alpha Corporation has a bond issue with an annual coupon rate of 10% and 1 year remaining until maturity. The par value of the bond is $1,000. Determine the price of the bond if the required rate of return is 8% and the bond pays interest semi-annual..
What is cost of common equity capital : Cost of common equity) Falon Corporation is issuing new common stock at a market price of $27.32. Dividends last year were $1.39 and are expected to grow at an annual rate of 7.4 percent forever. What is Falon's cost of common equity capital?
Bond issue outstanding with an annual coupon rate : Delta Corporation has a bond issue outstanding with an annual coupon rate of 7% and 2 years remaining until maturity. The par value of the bond is $1,000. Determine the price of the bond if present market conditions justify a 14% required rate of ret..
The debt is selling at par value-what is value of firm : L.A. Clothing has expected earnings before interest and taxes of $1,800, an unlevered cost of capital of 12 percent and a tax rate of 33 percent. The company also has $2,500 of debt that carries a 6 percent coupon. The debt is selling at par value. W..
About financial status of an organization : The requirement to provide financial accounting information is given by the need for outside stakeholders (primarily investors) to have reliable information about financial status of an organization?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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