Treasury note with two years to maturity

Assignment Help Financial Management

Reference no: EM13879338

Assume that $1000.00 par value, semiannual coupon U.S. Treasury note with two years to maturity (YTM) has a coupon rate of 5%. The yield to maturity of the bond is 8.80%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note.

Reference no: EM13879338

Questions Cloud

What was most recent dividend per share paid on the stock : Secolo Corporation stock currently sells for $51 per share. The market requires a return of 8.2 percent on the firm’s stock. If the company maintains a constant 2.1 percent growth rate in dividends, what was the most recent dividend per share paid on..

Explain what residual policy implies : One position expressed in the financial literature is that firms set their dividends as a residual after using income to support new investments. A. Explain what a residual policy implies (assuming that all distributions are in the form of dividends)..

Dividend on stock-what is the current share price : Estes Park Corp. pays a constant $8.30 dividend on its stock. The company will maintain this dividend for the next 14 years and will then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share pr..

Difference between the capm and the arbitrage pricing theory : What are two potential tests that can be conducted to verify the CAPM? What are the results of such tests? What is Roll's critique of CAPM tests? Briefly explain the difference between the CAPM and the Arbitrage Pricing Theory (APT).

Treasury note with two years to maturity : Assume that $1000.00 par value, semiannual coupon U.S. Treasury note with two years to maturity (YTM) has a coupon rate of 5%. The yield to maturity of the bond is 8.80%. Using this information and ignoring the other costs involved, calculate the val..

The cost of retained earnings is less than the cost : The cost of retained earnings is less than the cost of new outside equity capital. Consequently, it is totally irrational for a firm to sell a new issue of stock and to pay cash dividends during the same year. Discuss the meaning of those statements.

Company is obligated to sell more of the commodity : You observe that a company has entered into futures contracts where the company is obligated to sell more of the commodity it produces than the volume they actually expect to produce. How might this be justified? What if instead you observed that a c..

What are the yield to maturity ytm : BTR Co. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1000.00, and their current market price is $1130.35. However, BTR Co. may call the bonds in eight years at a call price of $106..

Potential conflicts between bondholders and shareholders : Do convertible securities aggravate or ease potential conflicts between bondholders and shareholders?

User Account

All Pages