Find the current yield on this bond

Assignment Help Financial Management
Reference no: EM131347711

A 20-year bond with X% annual coupons has a face value of $1,000. The price of the bond is $1, 050. The interest rate is 8% convertible semiannually. Assume redemption value equals par value. Find the current yield on this bond.

Reference no: EM131347711

Questions Cloud

Expected return on two stocks for particular market returns : Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return Aggressive Stock Defensive Stock 6% 2.8% 4.6% 15 28 10. What are the betas of the two stocks?
Find the net present value of project : Assuming a nominal rate of interest, convertible quarterly, of 12%, find the net present value of a project that requires an investment of $100,000 now, and returns $16,000 at the end of each of years 4 through 10.
About the company through its segmented data : Find the financial statements for a publicly traded company that provides segmented financial information. Prepare an overview (approximately 300 words) of what is revealed about the company through its segmented data. Post a link to the financial st..
What is bonds coupon rate : ABC Inc. just issued a twenty-year semi-annual coupon bond at a price of $1,000. The face value of the bond is $1,000, and the market interest rate is 9%. What is the bond's coupon rate?
Find the current yield on this bond : A 20-year bond with X% annual coupons has a face value of $1,000. The price of the bond is $1, 050. The interest rate is 8% convertible semiannually. Assume redemption value equals par value. Find the current yield on this bond.
Evaluate generation project with the cash flows : Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow 0 –$ 39,400,000 1 63,400,000 2 – 12,400,000 a-1 What is the NPV for the project if the company requires a return of 10 percent?
Compute the parameters of black-sholes model : Using historical data for the five companies and assuming that the strike price K is lower than current stock price by 2 dollars and then risk free rate is 3%, find the following. The value of a 5-year call option price written on those stocks. Fi..
Why would the drug maker want to stymie generic competition : AIU BUSN310- Why would the drug maker want to stymie generic competition? Explain. What types of legal barriers to market entry exist? What are the possible ethical dilemmas present in this example?
Retirement plan by considering two investment plans : Assume that you are setting up your retirement plan by considering two investment plans together. (Your retirement in 20 years). You want to earn a total of $1,000,000 after 20 years from the following two investment plans together.

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate net present value for the investment

XYZ Corporation is examining a potential investment opportunity that will require the company to spend $120 million up front. The company will finance this project with $90 million in equity with a required return of 12% and with $30 million in debt ..

  Contribution to the profit sharing plan on behalf of george

George, age 60, is a member of We Work, LLC. We Work sponsors a profit sharing plan. George’s portion of the net income was $200,000 and one-half of his self employment taxes were $8,258 for this year. If We Work makes a 25% of salary contribution on..

  Using constant growth DDM-intrinsic value of the stock

Odd Mountain Development Corporation is expected to pay a dividend of $3.00 in the upcoming year. Dividends are expected to grow at the rate of 6% per year. The risk-free rate of return is 5% and the expected return on the market portfolio is 15%. Th..

  Geometric average return for the period

A stock has annual returns of 5.4 percent, 12.9 percent, -3.8 percent, and 9.4 percent for the past four years. The arithmetic average of these returns is _____ percent while the geometric average return for the period is _____ percent.

  Use of truck will require increase-spare parts inventory

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $70,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $19,000. Use of the truck wil..

  About the effective annual rate

A firm plans to issue $5,000,000 of commercial paper for 30 days. A dealer will issue the paper at $4,985,000 at a fee of $2,000 in advance. What is the effective annual rate?

  What is the duration of a two-year zero-coupon bond

What is the duration of a two-year bond that pays an annual coupon of 11.6 percent and has a current yield to maturity of 13.6 percent? Use $1,000 as the face value. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? U..

  Developing product-identify potential gaps in product line

Developing a Product-Positioning Map for McDonald's Purpose Organizations continually monitor how their products and services are positioned relative to competitors. This information is especially useful for marketing managers but is also used by oth..

  Calculate the net present value of each project

Calculate the net present value (NPV) of each project, assess its acceptability, and indicate which project is best, using NPV.

  Hedging using foreign currency derivatives scout finch is

hedging using foreign currency derivatives scout finch is the chief financial officer cfo of salem manufacturing a u.s.

  What would be the net return of your proposal

Rudy and Karyn come across an investment opportunity that offers them a guaranteed return. The couple is excited by the opportunity but they don’t have enough liquidity to put the cash forward the investment. How can you justify your proposal? What w..

  What price should you consider paying for this bond

You are considering purchasing a 10% coupon bond that matures in 11 years. YTM on similar bonds with like risk characteristics currently yield 11%. What price should you consider paying for this bond? You have decided that you need $3 million to reti..

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