Find the total cash flow you will have six years

Assignment Help Financial Management
Reference no: EM132053180

You have a planning horizon of H = 6 years and wish to immunize your investment for that horizon. You attempt to do so by buying a perpetual bond that pays $69 annually and has a YTM of 13% p.a. You will reinvest the coupons throughout this 6-year period and, additionally, you will sell the bond at the end of that 6-year period. Find the total cash flow you will have 6 years from now if interest rates remain unchanged throughout your planning horizon. Give the answer with two decimals; e.g., 1234.56. As always, do not include the dollar sign in your answer, nor the comma separating the thousands.

Reference no: EM132053180

Questions Cloud

Find the resulting percentage change in the bond price : find the resulting percentage change in the bond's price.
Determine the most productive way of deploying capital : There are many different scenarios that we have to determine the most productive way of deploying capital,
What is expected return to zenyatta stock : Suppose the beta of Zenyatta Inc. is estimated to be 1.3, what is the expected return to Zenyatta stock?
What is current price per share : After that, the dividends will increase by 3.25 percent annually. The required return on this stock is 13.53 percent. What is the current price per share?
Find the total cash flow you will have six years : Find the total cash flow you will have 6 years from now if interest rates remain unchanged throughout your planning horizon.
Company produces candy and considers introducing new flavor : Your company produces candy and considers introducing a new flavor. How do I find the sales, deoreciation, variable costs, EBIT, Taxes, Net Income?
What would be appropriate estimate of stock price today : What would be an appropriate estimate of the stock price today?
The default probability of the corporate debt is low : High CDS spread means the default probability of the corporate debt is low.
Identifies method for calculating beta : Which of the following identifies a method for calculating beta? What is the average (arithmetic) return?

Reviews

Write a Review

Financial Management Questions & Answers

  Advantages-disadvantages of discounted cash flow valuation

A stock has a beta of 2, the risk-free rate is 4%, and the market risk premium is 6%. What is the expected return on the stock? What are the advantages and disadvantages of Discounted cash Flow valuation( in short)

  What is the relationship between coca cola and del monte

What is the relationship between Coca Cola and Del Monte and their respective employees and investors

  Cash flow analysis is setting the bid price on a project

Another utilization of cash flow analysis is setting the bid price on a project. To calculate the bid price, we set the project NPV equal to zero and find the required price. Thus the bid price represents a financial break-even level for the project...

  Miscalculated the amount of charity care

Assume Mercy Hospital miscalculated the amount of charity care it provided during the year that ended on December 31, 2012. If Mercy Hospital reported too little charity care in 2012, what would be the most likely effect on the income statement for t..

  What is the current value of these bank bills

what is the current value of these bank bills? Enter your answer to the nearest dollar.

  What was the taxpayer initial tax basis in the property

what was the taxpayer's initial tax basis in the property?

  Raise funds externally-what is self-supporting growth rate

Maggie’s Muffins, Inc., generated $5,000,000 in sales during 2013, and its year-end total assets were $2,500,000. Also, at year-end 2013, current liabilities were $1,000,000 consisting of $300,000 of notes payable, $500,000 of accounts payable, and $..

  Present value of each cash flow discounted at market rate

A one-year, $100,000 bond carries a coupon rate of 12% and a market interest rate of 12%.ent. The bond requires payment of accrued interest and one-half of the principal at the end of six months. The remaining principal and interest are due at the en..

  Maintain a target capital structure

David Rose Inc. forecasts a capital budget of $500,000 next year with forecasted net income of $400,000. The company wants to maintain a target capital structure of 30% debt and 70% equity. If the company follows the residual dividend policy, how muc..

  Potential impact the performance evaluation method

What are the potential impact the performance evaluation method (behavioral appraisals) could have on at least three different organizational stakeholder groups

  What was rotweiler net capital spending

The company’s 2010 income statement showed a depreciation expense of $178000. What was Rotweiler’s net capital spending for 2010?

  Increase the net present value of proposed investment

Which one of these has the least potential to increase the net present value of a proposed investment?

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