User Account

All Pages

How much is the value of Bond Quartz

Assignment Help Financial Accounting
Reference no: EM132902464

Problem - Bato Co is currently estimating the value of its securities given the following information:

Government securities currently trade at 4.5%

Credit spread for Bato Co is estimated as follows based on its maturity

3 year maturity - 3.5%

4 year maturity - 5.0%

5 year maturity - 6.0%

Based on current estimates the Beta of Bato is estimated at 0.75

Market risk premium for equity instruments is estimated at 6.5%

The following summarizes the instruments currently issued by Bato:

Bond Graphite - Php500,000 face value bond with a 5-year tenor carrying 8.0% coupon issued two years ago

Bond Quartz - Php750,000 face value bond with a 4-year tenor carrying 8.0% coupon issued just today

Bond Marble - Php1,000,000 face value bond with a 5-year tenor carrying a 12.0% coupon issued last year

10,000 common shares - Bato just declared a dividend of Php2.50 per share and is expected to grow by 20% over the next five years before slowing down to 5% beginning year 6

Required - How much is the value of Bond Quartz?

Reference no: EM132902464

Questions Cloud

Prepare the necessary journal entries to record the issue : Prepare the necessary journal entries to record the issue of the bond at face value and the payment of the first coupon on June 30, 2020
What are the weakness of medtronic : What are the weakness of Medtronic?
Illustrate and explain the phenomenon of liquidity trap : Illustrate and explain the phenomenon of liquidity trap. Distinguish between "excess demand" and "cost-push" causes of inflation.
Difference between workforce diversity-dimension diversity : What is the difference between workforce diversity and dimension diversity
How much is the value of Bond Quartz : Bond Graphite - Php500,000 face value bond with a 5-year tenor carrying 8.0% coupon issued two years ago. How much is the value of Bond Quartz
Create the dichotomous variables : Your firm just launched a new product and has solicited a large number of potential customers to rate its effectiveness between 0 and 100. You are particularly
What is a description of the trading strategy : What is a description of the trading strategy where investor sells a 3-month call option and buys one-year call option, where both options have a strike price?
Intervention technique for organizational change : How can benchmarking become an intervention technique for organizational change?
What are the proceeds of the sale : After 1%% years, the note was sold to a finance company at a discount rate of 45.60% compounded monthly. What are the proceeds of the sale

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd