Market value of debt is the same as its face value

Assignment Help Financial Management

Reference no: EM131546947

1. When the market value of debt is the same as its face value, it is said to be selling at the:

a) discounted value.

b) maturity value.

c) par value.

d) yield value.

2. Devine Divots issued a bond a few years ago. The bond has a face value equal to $1,000 and pays investors $30 interest every six months. The bond has eight years remaining until maturity. If an investor requires a 7 percent rate of return to invest in this bond, what is the maximum price the investor should be willing to pay to purchase the bond? (Round the answer to two decimal places.)

a) $940.29

b) $1,062.81

c) $965.63

d) $939.53

Reference no: EM131546947

Questions Cloud

Explain the key concepts in economics : Identify at least four (4) key points of a relevant economic article from either the Strayer Library or a newspaper. The article must deal with any course.

Describe how the chemical characteristics : Describe how the chemical characteristics, production methods, uses, and associated unique hazards of sulfur can affect the safety of an environmental health.

Examples for negative health behavior : Write a four , single spaced, paper applying a Health Behavior Theory to one of your negative health behaviors

Calculate the debroglie wavelength of an electron : Calculate the DeBroglie wavelength of an electron traveling 22.5% the speed of light. Report answer in meters to 3 significant digits.

Market value of debt is the same as its face value : When the market value of debt is the same as its face value, it is said to be selling at the:

Determining the value of absolute zero : In designing an experiment on determining the value of absolute zero, should you try to control the heating/cooling rate of the apparatus to be slow or fast?

Determining the value of absolute zero : In designing an experiment for determining the value of absolute zero, should you aim to use a large or a small initial volume of gas? Explain why

Describe federal computer-related laws and legislation : You have been hired as the Chief Security Officer for a local University. For this role you will be responsible for establishing and maintaining an enterprise.

Compute the discounted payback statistic for project : Compute the discounted payback statistic for Project C if appropriate cost of capital is 6 percent and maximum allowable discounted payback period is 3 years.

User Account

All Pages