Find the price that will guarantee investor yield rate

Assignment Help Financial Management

Reference no: EM132048638

Suppose that a 10-year bond with a face value of $1000 pays semiannual coupons at a rate of 4.2% per half year. The issuer of the bond has the option to redeem it at the time of the 16th coupon for $2200 or at maturity for $2000. Find the price that will guarantee an investor a yield rate of at least 12.6% convertible semiannually, regardless of when the bond is redeemed.

P = $ (3 decimal place)

Reference no: EM132048638

Questions Cloud

What is the impact on cash flow in euros and dollars : What is the impact on cash flow in euros and dollars? What is the reasoning for the change in prices of exported goods?

Stock repurchase is more desirable than cash dividend : In general, from the perspective of shareholders in a high tax bracket, a stock repurchase is more desirable than a cash dividend.

Interpret the assumptions related to the problem : Describe and interpret the assumptions related to the problem. Calculate the correct solution to the problem.

Why cash flows are preferred to accounting profits : Explain how accounting profits and cash flows are not the same things? Ilustrate why cash flows are preferred to Accounting profits?

Find the price that will guarantee investor yield rate : Find the price that will guarantee an investor a yield rate of at least 12.6% convertible semiannually, regardless of when the bond is redeemed.

What is the npv of the new system : If your firm has a required return of 15%, what is the NPV of the new system?

New sound board used in recording studios : Rolston Music Company is considering the sale of a new sound board used in recording studios.

How much lizard received using this strategy : How much Lizard received ( or paid ) using this strategy? what is the name of this strategy ?

Bank loans and requires monthly payments : Left Bank has a standing rate of 8.4 % (APR) for all bank loans and requires monthly payments.

User Account

All Pages