The yield to maturity remains constant for next three years

Assignment Help Financial Management
Reference no: EM13971192

A bond has a $1,000 par value, 12 years to maturity, and a 8% annual coupon and sells for $980.

a. What is its yield to maturity (YTM)? Round your answer to two decimal places.

%

b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Round your answer to the nearest cent.

 

$

Reference no: EM13971192

Questions Cloud

Deposit your savings in an account that pays : You want to buy a new sports car 3 years from now, and you plan to save $7,400 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3rd deposit, 3..
Is she in time to collect any evidence from the road : Inspector Carol Ketchum is in pursuit of a Midnight Chemical truck that has spread waste solvents, mostly cis-1,2-dichloroethene, in a uniform layer 2 mm thick on the roadway. She arrives 20 min after the truck has finished emptying its load. Is ..
How much has abc left on the table : How many shares must be sold to bet $30 million? What are ABC's total costs for the IPO?
Analyze how the enterprise architecture affects organization : This assignment gives you the opportunity to apply your critical thinking skills and understanding of the course concepts to analyze how the enterprise architecture (EA) affects various elements of the organization
The yield to maturity remains constant for next three years : bond has a $1,000 par value, 12 years to maturity, and a 8% annual coupon and sells for $980. What is its yield to maturity (YTM)? Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Rou..
Mortgage with a fixed rate : Yorgi obtained a $250,000 mortgage with a fixed rate of 5.6% and a 20-year maturity. What are Yorgi's monthly payments on the mortgage?
Evaluate competing investment alternatives : The company is considering either use the payback method or discounted cash flow analysis or a combination of both to evaluate competing investment alternatives. Discuss and justify which of these three options the company should rely on when to m..
Capital budegeting cash flows : The present value of the cash flows dictates the manager's decision. Are cash flows that are estimated in lease analysis more or less risky than capital budegeting cash flows?
Describe in what way your proposed business action : Describe in what way your proposed business action is an innovative idea - Create a vision of your idea that explains the value to the company.

Reviews

Write a Review

Financial Management Questions & Answers

  At what price will lauren receive a margin call

Lauren purchased 200 shares of stock at $19 using her 70% margin account. Her maintenance margin is 40%. Lauren has no other securities in her account. At what price will Lauren receive a margin call?

  Any signalling effects of dividends should occur

Any signalling effects of dividends should occur on the ____________

  Place in the savings account

Camillia plans to go on vacation to Australia 11 years from now. She estimates that she will need $24,186 for the trip. How much does she need to place in the savings account today, assuming that she earns 7.59 percent per year, compounded QUARTERLY,..

  Components used in production has annual demand

Mouse Parts produces mouse ears, white gloves and other parts that are incorporated into the production of Mickey Mouse souvenirs. One of the components used in production has an annual demand of 250 units, and this is constant throughout the year. C..

  Calculate the exercise value of firms warrants

Calculate the exercise value of the firm's warrants if the common sells at each of the following prices: Assume the firm's stock now sells for $20 per share. The company wants to sell some 20-year, $1,000 par value bonds with interest paid annually. ..

  About the annual pretax cost savings

Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $390,000 is estimated to result in $150,000 in annual pretax cost savings.

  Total assets and accounts payable are proportional to sales

At year-end 2013, Wallace Landscaping total assets were $1.0 million and its accounts payable were $350,000. Sales, which in 2013 were $2.5 million, are expected to increase by 25% in 2014. Total assets and accounts payable are proportional to sales,..

  Calculate a table of interest rates based

Calculate a table of interest rates based on the following information: The pure interest rate is 1.6% Inflation expectations for year 1 = 3%, year 2 =3.5%, years 3-5 =5% The default risk is .1% for year one and increases by .2% over each year Liquid..

  Effective annual interest rate on this leading arrangement

You've worked out a line of credit arrangement that allows you to borrow up to $40 million at any time. The interest rate is .56 percent per month. In addition, 4 percent of the amount that you borrow must be deposited in a non-interest-bearing accou..

  Estimate of the net present value

An analysis of what happens to the estimate of the net present value when you examine a number of different likely situations is called _____

  What is conversion value of each convertible bond at year

Frye Inc. is considering raising the new capital through issuing convertible bonds which will be sold at par, carry a coupon rate of 6% - annually paid, have 20-year maturity, and can be converted into 23 shares of stock. The bonds would be non calla..

  Influence risk levels in international business

List 3 of the Primary factors that influence risk levels in international business but not typically in domestic business.

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