Determine what is the market price of the bond

Assignment Help Financial Management
Reference no: EM132032484

A treasury bond pays 9% coupon p.a. On June 12, the bond has 63 days to the next coupon payment and there are 297 days since the last coupon payment (assume that there are 360 days in a year).

Since the last coupon payment, the bond will have 5 years to maturity. The current market yield for the bond is 8%. What is the market price of the bond?

Reference no: EM132032484

Questions Cloud

Compute the aftertax cost of debt : The treasurer of Riley Coal Co. is asked to compute the cost of fixed income securities for her corporation.
Construct a monthly cash budget for westmark for jan : Construct a monthly cash budget for westmark for Jan. thru March 2015. Westmarks sales are 20% for cash, w/ the rest on 30 day credit terms.
What is the cost of the preferred stock including flotation : The stock is currently selling for $97.00; but flotation costs will be 10% of the market price, so the net price will be $87.30 per share.
What is its price if the relevant market interest rate is : A treasury bond will reach maturity in 4 years. Bond pays a coupon of $425 per year and will make a final par value payment of $10,000 at maturity.
Determine what is the market price of the bond : Since the last coupon payment, the bond will have 5 years to maturity. The current market yield for the bond is 8%. What is the market price of the bond?
What was the companys depreciation and amortization expense : The company has $6,900 interest expense, and the corporate tax rate is 35 percent. What was the company's depreciation and amortization expense?
Why a profit of loss took place on the futures contracts : She will sell five Treasury futures contracts at $138,000 per contract. It is July, and the contracts must be closed out in December of this year.
Calculate the approximate real rate of interest : Treasury bills are currently paying 5 percent and the inflation rate is 2.7 percent.
How much interest has accrued so far : A Treasury bond pays semi-annual coupons at 6% per annum on 1st of January and 1st of July every year. Today is 23rd February 2017.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the percentage price change of these bonds

Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 19 years to maturity, make semiannual payments, and have a YTM of 8 percent. If interest rates suddenly rise by 2 percent, what is the percentage price ..

  Calculate price of stock in order to receive margin call

Calculate the price of the stock in order to receive a margin call. Who sets maintenance margin requirements?

  Convert the bond at the end of second year

Prospect Corporation is a venture capital company. Convert the bond at the end of second year.

  Accurate result of bond price alteration

In which cases is duration sufficient to give us an accurate result of a bond price alteration? Why?

  Considering is expected to generate an operating cash flow

A new project you are considering is expected to generate an operating cash flow of $45,620 and will initially free up to 22,000 in net working capital. purchases of fixed assets costing 68,800 will be required to start up the project. what is the to..

  Prepare a budget based upon the amount of cash flow

You are trying to prepare a budget based upon the amount of cash flow that you will have available 5 years from now.

  For financial leverage other than fixed vs variable cost

For financial leverage other than fixed vs variable cost what other factors should be considered? Is it necessarily the case that a company that is comfortable with high operating leverage should be equally at ease with high financial leverage? Will ..

  Risky should have to earn internal rates of return

To be accepted, projects that are unusually risky should have to earn Internal Rates of Return that are ____ those earned by a firm’s typical projects.

  The roth ira allows you to have tax free retirement plan

The ROTH IRA allows you to have tax free retirement plan. How can “tax free” help you accomplish your retirement goals?

  Equivalent annual cost to evaluate

You can continue to use your less efficient machine at a cost of $4,000 annually for the next five years. Use Equivalent Annual Cost to evaluate.

  What is the prevailing cost of capital

If a $100 bond collateralized by this project promises an interest rate of 8%, then what is the prevailing cost of capital.

  What is the required yearly savings

Eleanor needs $40,000 a year to live on in retirement net of the income she will receive. What is the required yearly savings?

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