Interest payments and principal repayments

Assignment Help Financial Management
Reference no: EM131825214

1. What is the difference between amortizing a loan with annual payments and paying it off entirely? Also, what are the formula differences between present values (PV) of interest payments and principal repayments?

2. 27 years ago, Mini Max Inc. issued 30 year to maturity zero-coupon bonds with a par value of $1,000. Now the bond has a yield to maturity of 10.75 percent, compounded semi-annually. What is the current price of the bond?

Reference no: EM131825214

Questions Cloud

Calculate the company income taxes : The SGS Co. had $229,000 in taxable income. Use the rates from Table 2.3. Calculate the company’s income taxes.
What is the current market price of bonds : The current market rate of interest on the Bright Sun bonds is 8.67 percent. What is the current market price (intrinsic value) of the bonds?
Covariance of minimum variance portfolio : What is the covariance of the minimum variance portfolio with the S&P index?
Calculate the effective interest rate : Calculate the nominal interest rate charged for this financing arrangement. Calculate the effective interest rate.
Interest payments and principal repayments : What are the formula differences between present values (PV) of interest payments and principal repayments?
What is the dividends per share figure : Pharrell, Inc., has sales of $590,000, costs of $268,000, depreciation expense of $68,500, What is the dividends per share figure?
Assume annual coupon payments : What is the yield to call of a 30-year to maturity bond that pays a coupon rate of 14.77 percent per year, Assume annual coupon payments.
What is current price of the bond : The current interest rate on this type of bond is 5.72 percent, compounded annually. What is the current price of the bond?
How much value has the company created for its shareholders : calculate the companys market value added. calculate the market to book ratio. how much value has the company created for its shareholders?

Reviews

Write a Review

Financial Management Questions & Answers

  Divided between a capital gains yield and a dividend yield

Suppose you know that a company’s stock currently sells for $63 per share and the required return on the stock is 13 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it..

  Methods to reduce the investment in current assets

Are the methods to reduce the investment in current assets applicable to every organization? OR are some methods only suitable for organizations with specific characteristics?

  What is the collection forecast

Use the data below from a company 's sales for January to April to get a forecast for the collection forecast, including cash sales, for April: Month Sales. Of the sales above, 30% are for cash and 70% are for credit. Of the credit sales, 58% are col..

  Difference between hedge funds and futures funds

Explain the difference between hedge funds and futures funds? What are the objectives of federal regulation of future markets?

  Calculate the cost of not taking a cash discount

Calculate the cost of not taking a cash discount. (Use 365 days in a year. Do not round intermediate calculations. Round the final answers to 2 decimal places.)

  Your firm was using too much financial leverage

If you were the CFO, what signs would you look for to determine if your firm was using too much financial leverage? What could you do if these signs were encountered? Elaborate and Explain. What were the main causes of the Great Recession of 2008-200..

  Considering replacing existing production line with new line

ACME Manufacturing management is considering replacing existing production line with new line that has greater output capacity-operates with

  How much additional money must he deposit

Eddie needs $50,000 as a down payment for a house 6 years from now. He earns 3% per year on his savings. He can either deposit one lump sum today for this purpose or he can wait a year and deposit a lump sum. How much additional money must he deposit..

  What is net rate of return from this investment

What is the net rate of return from this investment?

  Contrast straight-line depreciation and macrs depreciation

Compare and contrast straight-line depreciation and MACRS depreciation. Given the choice, would a firm prefer to use straight-line depreciation or MACRS depreciation? Why?

  Issued three-month t-bill expects interest rates to increase

Current T-bill yields are approximately 2 percent. Assume an investor considering the purchase of a newly issued three-month T-bill expects interest rates to increase within the next three months and has a required rate of return of 2.5 percent. Base..

  Strategy of continually attempting to generate high returns

International Fisher Effect. If a U.S. firm believes that the international Fisher effect holds, what are the implications regarding a strategy of continually attempting to generate high returns from investing in currencies with high interest rates?

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