Original face value-what is the annual payment

Assignment Help Financial Management
Reference no: EM131319606

A perpetuity has a original face value of $1,000 and a yield of 4%.

(a) what is the annual payment?

(B) if the yield rises to 10%, what is the new price?

(C) if the price rises to $2,000, what is the new yield?

Reference no: EM131319606

Questions Cloud

Reported figures of the percent of girls born in china : According to an article in Newsweek, the natural ratio of girls to boys is 100:105. In China, the birth ratio is 100: 114 (46.7% girls). Suppose you don't believe the reported figures of the percent of girls born in China.
What is the probability that the other coin is a head : You watch Fred play the game. He tosses the two coins, and he points to a coin and says ‘look, that coin's a head, I've won'. What is the probability that the other coin is a head?
How will you notify people of potentially dangerous : Hazard communication: How will you notify people of potentially dangerous or unhealthy work conditions? Blood-borne pathogens: How will you protect employees from blood-borne pathogens such as AIDS
What is the slope of the least-squares : What is the slope of the least-squares (best-fit) line? Interpret the slope
Original face value-what is the annual payment : A perpetuity has a original face value of $1,000 and a yield of 4%. what is the annual payment? if the yield rises to 10%, what is the new price? if the price rises to $2,000, what is the new yield?
Paper about book of second isaiah : Paper about "book of Second Isaiah". Teach this book to someone else, with special attention to that subject matter (force, violence, and social justice) which is found in your chosen book
What are the cycle times and hourly productions : What are the advantages and disadvantages of in-pit crushing - If all other factors remain the same which haul route should be selected on the basis of shortest cycle times? What are the cycle times and hourly productions?
Discuss the american ideals or philosophies : Describe how characteristics of the region of Colonial America impacted your chosen conflict. Discuss the American ideals or philosophies that may have caused this event to occur. How have these ideals and philosophies changed to the way we live toda..
The preemptive right is important to shareholders : The preemptive right is important to shareholders because it. Assume the risk-free is 2 percent, the required return on the market is 13 percent, and Stock J's beta is 1.80. If expected inflation decreases by 0.75 percentage point, and investors' ris..

Reviews

Write a Review

Financial Management Questions & Answers

  Small company stocks rather than t-bills

The historical average return on U.S. T-bills is 3.8% per year, while the average return for small company stocks is 16.9% per year. Assuming these rates occur annually in the future, how much more cash would you have in 20 years by investing $50,000..

  The risk-free interest rate is zero

A call option with X = $51 on a stock currently priced at S = $54 is selling for $8. Using a volatility estimate of σ = 0.34, you find that N(d1) = 0.7311 and N(d2) = 0.6722. The risk-free interest rate is zero. Is the implied volatility based on the..

  Nation-state whose government no longer effectively function

A nation-state whose government no longer effectively functions and has lost control of a significant portion of its territory is known as which of the following?

  Implied by the two outstanding debt issues

Erna Corp. has 8 million shares of common stock outstanding. The current share price is $73, and the book value per share is $7. Erna Corp. also has two bond issues outstanding. Suppose the most recent dividend was $4.10 and the dividend growth rate ..

  How much is the company behind in preferred dividends

National Health Corporation (NHC) has a cumulative preferred stock issue outstanding, which has a stated annual dividend of $8 per share. The company has been losing money and has not paid preferred dividends for the last five years. How much is the ..

  Compute the EAC for both machines

You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a three-year life, and has pretax operating costs of $69,000 per year. If your tax rate is 35 percent and your discount rate is 9 percent, compute the ..

  What is the required percentage rate of return of equity

Companies U and L are identical in every respect except that U is unlevered while L has $10 million of 4.6% bonds outstanding. Assume that (1) all of the MM assumptions are met, (2) there are no corporate or personal taxes, (3) EBIT is $1.7 million, ..

  What is the last dividend paid

Motors Co stock has a required rate of return of 11.50% and it sells for 25$. Dividend is expected to grow at constant rate of 7%. What is the last dividend paid?

  Calculate kevins return-what is the current yield on bond

Kevin purchases 100 shares of Coca- Cola at $42.40 a share in January. The company paid a dividend of .25 per share and he sells the stock after a year for $43.00 a share. Calculate Kevin's return. A technology company has total liabilities of $60,00..

  What would be an appropriate estimate of the stock price

A company is expected to pay a dividend of $1.37 per share one year from now and $1.84 in two years. You estimate the risk-free rate to be 4.2% per year and the expected market risk premium to be 5.9% per year. Analysts expect the price of the stock ..

  According to the efficient markets hypothesis

According to the efficient markets hypothesis, professional investors will earn: excess profits over the long-term. a dollar return equal to the value paid for an investment. excess profits, but only on short-term investments. a return that "beats th..

  Purchasing a new piece of manufacturing equipment

A company is considering various options for purchasing a new piece of manufacturing equipment. The price of the equipment is $150,000. It is estimated that the equipment will be worthless after 10 years of service. Compute the best monetary value fo..

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