How much would you pay for one of the bonds

Assignment Help Financial Management

Reference no: EM131338468

Waters, Inc., has outstanding a $100 million (face value) issue of bonds. The bonds pay a coupon rate of interest of 8 percent per annum. At the time the bonds were first issued, they sold at face value of $1,000 per bond.

The bonds have 12 years remaining until maturity. They are "puttable" at the option of the bondholder at face value in 5 years. The bonds are not callable by the company.

If you require a 9 percent return on bonds such as these with 5 years remaining until maturity and 8.2 percent on bonds such as these with 12 years remaining until maturity, how much would you pay for one of these bonds?

Reference no: EM131338468

Questions Cloud

Concepts related to labor and employment laws : Choose one of the following: Equal Employment Opportunity Act of 1972, Title VII of the Civil Rights Act, Age Discrimination in Employment Act of 1967, American with Disabilities Act of 1990, Equal Pay Act f 1963, Genetic information Nondiscrimin..

How much would you pay for one of the bonds today : Zabberer Corporation bonds pay a coupon rate of interest of 12 percent annually and have a maturity value of $1,000.- how much would you pay for one of these bonds today?

Decide which short-short story is the best : To decide which short-short story is the "best," you will need to first skim all the stories provided and make some notes on your impressions. Decide in which order to read the stories. Then read each story.

Contribute to postive employee relations : How does effective communications contribute to postive employee relations?

How much would you pay for one of the bonds : If you require a 9 percent return on bonds such as these with 5 years remaining until maturity and 8.2 percent on bonds such as these with 12 years remaining until maturity, how much would you pay for one of these bonds?

Write a formula for the area of the segment : A segment of a circle is the region bounded by an arc and its chord. Consider any minor arc. If is the radian measure of the central angle and r is the radius of the circle, write a formula for the area of the segment.

Addressing the management of wastes : In a min of 300 words, use at least two pier reviewed references,and in APA style discuss the transporters role, the port's role and the government's role in controlling invasive species and other hazards inherent in the movement of goods, goods t..

What were the tanzimat reforms and were they effective : By the early 18th century, the Ottoman Empire, which ruled the Middle East, was in decline. Weak rulers left the way open for power struggles between officials, religious experts, and Janissaries (Guards). Provincial administrators and landholders..

Maximum value for which share can be expected to trade : If the market requires a 12 percent rate of return on a stock of this risk and maturity, what is the maximum value for which this share can be expected to trade?

User Account

All Pages