What coupon rate do you need to set

Assignment Help Financial Management
Reference no: EM132005863

Your company currently has $1,000 par, 6% coupon bonds with 10 years to maturity and a price of $1,087.

If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set. Assume that for both bonds, the next coupon payment is due in exactly six months.

You need to set a coupon rate of ?

Reference no: EM132005863

Questions Cloud

Why is the feature concern-what does mean for investors : why is the feature a concern? what does this mean for investors? can investors avoid this feature, why or why not?
What is the maturity of the bond and coupon rate : What is the maturity of the bond? (in years)? What is the coupon rate? (as a? percentage)?
What is the bond yield to maturity : What is the bond's yield to maturity? (expressed as an APR with semiannual compounding)?
What is this bond time to maturity : A bond issued by Ford on May 15, 1997 is scheduled to mature on May 15, 2097. If today is November 16, 2002, what is this bond’s time to maturity?
What coupon rate do you need to set : If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set?
What is the yield to call of the bond : The call premium is one year of coupon payments. It is offered for sale at $1,116.75. What is the yield to call of the bond?
What will be the change in the bond price in dollars : The new appropriate discount rate will be 7.6 percent. What will be the change in the bond’s price in dollars?
What would be the total return of the bond in dollars : You believe that in one year, the yield to maturity will be 6.7 percent. What would be the total return of the bond in dollars?
What is the change in price bond will experience in dollars : You believe that in one year, the yield to maturity will be 7.0 percent. What is the change in price the bond will experience in dollars?

Reviews

Write a Review

Financial Management Questions & Answers

  Accelerated depreciation will increase the firms cash flow

Depreciation is an accounting concept intended to match the cost of an asset with the revenue the asset produces over time. It’s not a cash flow. But going from a straight-line depreciation calculation to some form of accelerated depreciation will in..

  Charges customers for their wind generated electricity

Viento Windmills is a utility that charges customers for their wind generated electricity. With their current technology, they earn a total of $65 million each year to pay out to their 3 million shareholders.

  Calculate the after-tax rate of return on the taxable bond

You can invest in taxable bonds that are paying yield of 8.3% or municipal bond paying yield of 6.85 percent. Calculate after-tax rate of return on taxable bond

  What changes in the regulation of mutual funds

What changes in the regulation of Mutual funds have been adopted by the regulators in response to the abuses and scandals in this industry?

  Compute jill annual irr from owning net of renting

Buying expenses are 5% of purchase price and selling expenses are 8% of sale price. Compute Jill’s annual IRR from owning net of renting.

  What is your rate of return on position

What is your rate of return on this position, if you close it out at $37 per share after one year?

  Calculate the estimated value of share

Based on analysis of the company and expected industry and economic conditions, China imports is expected to earn 4.60 per share of common stock next year. The average price/earnings ratio for firms in the same industry is 8. Calculate the estimated ..

  What is the profit of the straddle when stock price

What’s the profit of the “Straddle” when stock price is $25, $30, $35, $40, $45, $50, $55, and $60 respectively?

  Why is the current yield less than yield to maturity

What is the yield to maturity on the bond? Why is the current yield less than the yield to maturity?

  Bonds on the market making annual payments

Essary Enterprises has bonds on the market making annual payments, with nine years to maturity, a par value of $1,000, and selling for $966. At this price, the bonds yield 6.8 percent. What must the coupon rate be on the bonds?

  Compute the value of stock with required return

A firm is expected to pay a dividend of $3.05 next year and $3.35 the following year. Financial analysts believe the stock will be at their price target of $120 in two years. Compute the value of this stock with a required return of 13.3 percent.

  Interim assessment of international financial management

Assessment for the Interim Assessment of International Financial Management - the value to QN of taking out short term derivatives and a comparison between futures and a forward rate

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