Find the yield rate sojourner earned on her investment

Assignment Help Financial Management

Reference no: EM131317047

Seth borrows $1000 at 5% for 20 years from Sojourner. After 10 years, Sojourner sells the rights to future payments to Johnathon for $P.

(a) Find P, if Johnathon plans to accumulate a sinking fund at 4% to replace P and desires a yield of 6%.

(b) Find the yield rate Sojourner earned on her investment.

Reference no: EM131317047

Questions Cloud

Analysts estimates of the beta : You have discovered three analysts' estimates of the Beta for Kuschel Corp.: 1.74, 1.51, and 1.64. The Treasury Bond rate is estimated at 4%. The Market Risk Premium is estimated to be 4%. The estimated cost of equity, Re, for Kuschel Corp. is %.

What is the annualized percentage all-in cost : Nakatomi Toyota. Nakatomi Toyota buys its cars from Toyota Motors (U.S.), and sells them to U.S. customers. One of its customers is EcoHire, a car rental firm that buys cars from Nakatomi Toyota at a wholesale price. What is the annualized percentage..

The stock is currently trading : The most recent dividend for Terminus Corp. was $2.39. The dividend is expected to grow by 6% per year indefinitely. The stock is currently trading for $34 per share. The estimated cost of equity, Re, is %.

Nominal cost of preferred equity adjusted for flotation cost : An issue of preferred stock pays a $1.42 dividend each quarter, and is currently trading at $94 per share. Flotation costs are estimated to be $0.86 per share. The nominal cost of preferred equity (Rp) adjusted for flotation costs, is %.

Find the yield rate sojourner earned on her investment : Seth borrows $1000 at 5% for 20 years from Sojourner. After 10 years, Sojourner sells the rights to future payments to Johnathon for $P. Find P, if Johnathon plans to accumulate a sinking fund at 4% to replace P and desires a yield of 6%. Find the yi..

What is the crossover rate for these two projects : Seether, Inc., has the following two mutually exclusive projects available. What is the crossover rate for these two projects?

An investment has an installed cost : An investment has an installed cost of $573,382. The cash flows over the four-year life of the investment are projected to be $202,584, $246,318, $194,674, and $162,313. At what discount rate is the NPV just equal to zero?

First payment will be received in one year : What is the maximum price you will pay for a bond with a face value of $1000 and a coupon rate of 14?%, paid? annually, if you want a yield to maturity of 10?%? Assume that the bond will mature in 10 years and the first payment will be received in on..

Motivating independent distributor salespeople : American Olean Tile Company: Motivating Independent Distributor Salespeople Getting the attention of distributor salespeople in the floor-covering business, as in many industries, can be a daunting challenge. Which element or elements of the incentiv..

User Account

All Pages