Market interest rates on similar bonds

Assignment Help Financial Management

Reference no: EM131188078

General Mills has a $1,000 par value, 12-year to maturity bond outstanding with an annual coupon rate of 8.34 percent per year, paid semiannually. Market interest rates on similar bonds are 9.64 percent. Calculate the bond’s price today. Round the answer to two decimal places.

Reference no: EM131188078

Questions Cloud

What is the difference between call options and put options : Equity Inc. (Equity), a private company, has decided to issue call options. Under the terms of the options, the investors will pay a $10 premium for each option up front and obtain the right to buy 100 shares of Equity for $100 each. Equity has not d..

What would the annual yield to maturity : Fresh Fruit, Inc. has a $1,000 par value bond that is currently selling for $819. It has an annual coupon rate of 6.64 percent, paid semiannually, and has 21-years remaining until maturity. What would the annual yield to maturity be on the bond if yo..

Managing is expecting an inflow of funds : Suppose that the pension fund you are managing is expecting an inflow of funds of $100 million next year and you want to make sure that you will earn the current interest rate of 8% when you invest the incoming funds in long-term bonds. How would you..

What is the yield to maturity for these bonds : Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 10-year to maturity, carry a 15.88 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that t..

Market interest rates on similar bonds : General Mills has a $1,000 par value, 12-year to maturity bond outstanding with an annual coupon rate of 8.34 percent per year, paid semiannually. Market interest rates on similar bonds are 9.64 percent. Calculate the bond’s price today.

Increase the federal funds rate to new prescribed target : Explain how the Federal Reserve can increase the Federal Funds rate to a new prescribed target. In your explanation, include the Federal Reserve's underlying policy tool, how the Fed needs to use it for this task, and a balance sheet for the Fed that..

Determine the economic order quantity : Vergas Enterprises wishes to determine the economic order quantity (EOQ) for a critical and expensive inventory item that it uses in large amounts at a relatively constant rate throughout the year. The firm uses 450 000 units of the item annually and..

Explain how multiple expansion applies : In recent years Sweep Programs have grown throughout the U.S. With this financial innovation, banks automatically sweep excess funds from their customers’ checkable deposits into interest bearing MMDAs, which are part of savings and time deposits. Br..

What is the current market price of the bonds : Bright Sun, Inc. sold an issue of 30-year $1,000 par value bonds to the public. The bonds had a 10.97 percent coupon rate and paid interest annually. It is now 15 years later. The current market rate of interest on the Bright Sun bonds is 8.65 percen..

User Account

All Pages