What is a sinking fund provision

Assignment Help Corporate Finance
Reference no: EM13972453

1. ABC has $1,000 face value bonds outstanding. These bonds pay interest semi-annually, mature in 10 years, and have a 7.5 percent coupon. The current price is quoted at 99.59 percent of par value. What is the yield to maturity? What is the current yield?

2. Refer to 1 above. Suppose the bonds are callable in 5 years at 105 percent of par value, what is the yield-to-call?

3. ABC's bonds have a 9.5 percent coupon and pay interest semi-annually. Currently, the bonds are quoted at 106.315 percent of par value. The bonds mature in 12 years. What is the yield to maturity? What is the current yield?

4. Refer to 1 above. Suppose the bonds are callable in 5 years at 110 percent of par value, what is the yield-to-call?

5. When is a company likely to make a call - when the interest rates go up or go down? why?

6. What is a sinking fund provision? 

Reference no: EM13972453

Questions Cloud

What is the adjusted reconciled balance : The checkbook of vance company had a balance of 2,210.55 the bank statement showed a balance of 4,918.18 the bank collected 2000 note minus a 5 dollar service charge there was a deposit in transit of 610.88 several checks outstanding totaled 1,196.17..
How can the american legal system : How can the American legal system, which is so devoted to protecting individual rights, justify itself morally if it jeopardizes, through its own rules, the right of law-abiding citizens to personal peace and security.
The expected price of the stock at the end of year : Unlimited Corp. just paid a $.50 dividend per share and plans to double the dividend each of the next 2 years, and then dividends will grow 5% for the foreseeable future. If r is 10%, what is the expected price of the stock at the end of this year?
The average height of the students : The average height of the 25 students in Mr. Stanton's tenth grade math is known to be 66
What is a sinking fund provision : When is a company likely to make a call - when the interest rates go up or go down? why? Refer to 1 above. Suppose the bonds are callable in 5 years at 110 percent of par value, what is the yield-to-call?
Firms earnings per share after the recapitalization : The firm is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 25% debt based on market values, its cost of equity, rs, will increase to 11% to reflect the increased risk. What happens..
Optimal capital structure-cost of common equity : F. Pierce Products Inc. is considering changing its capital structure. F. Pierce currently has no debt and no preferred stock, but would like to add some debt to take advantage of low interest rates and the tax shield. what is the firm's optimal capi..
Any tax loss carry back or carry forward provisions : During 2014, Eagle Beach Company EBC) had sales of $1,000,000, cost of goods sold of $425,000, administrative and selling expenses of $95,000, depreciation expense of $140,000 and interest expense of $70,000. The tax rate is 35 percent. Ignore any ta..
What is a discount bond : A Bond is currently selling for $1040 and has a coupon rate of 8%. Should the YTM be higher or lower than 8%? What is a discount bond? a premium bond?

Reviews

Write a Review

Corporate Finance Questions & Answers

  Purchase of a disability policy

Explain how long will it be before this amount covers only 70% of my future salary if I assume salary increases of 4% per year

  Identifing the likely stage for every venture

The given ventures are at different stages in their life cycles. Identify the likely stage for every venture & explain type of financing every venture is likely to be seeking and identify potential sources for that financing.

  Compute the roi for the coming year

Suppose that the average operating assets of the Components Division total $10 million. Compute the ROI for the coming year, assuming that the 50,000 units are transferred to the Goods Division for $21 each.

  What likely direction of change in cash flow from operations

What is the likely direction of change in cash flow from operations? How would your answer be different if sales and net income were increasing?

  Why family ?rms promising laboratory to empirically examine

From the perspective of corporate governance researchers, why are family ?rms a promising laboratory to empirically examine questions of general interest in ?nancial economics?

  Calculation of present value and future value

An investment scheme pays 200 dollar at the end of each of the next four years, $400 at the end of year five, dollar 300 at the end of year six and $500 at the end of year seven.

  Explain the concept of incremental cash flow analysis

Explain the concept of incremental cash flow analysis and its purpose and explain the difference between a sunk cost and an opportunity cost and give an example of each.

  Prepare a capital statement for partnership and stockholders

Prepare a capital statement for the partnership and a stockholders' equity statement for the corpora­ tion, as of December 31, 19X5.

  Which of the three regressions would you most rely on

Which of the three regressions would you most rely on, and why? Were the authors of the study correct about their expectation regarding the PL variable?

  Prepare a five year table to amortize the premium

Suppose the same set of facts for Stacy Corporation as in Problem 10-2 except that market rate of interest of January 1, 2008, is 8 percent & proceeds from bond issuance equal $10,803.

  Compute the expected return for the year period

Compute the expected return for the year period for each stock plus the market using the capital asset pricing model.  Assume the return on the market is 8.0 and compute the coefficient of variation for each stock plus the market for the 5 year per..

  Would you want brian to keep current machine or purchase new

As the owner of Choco-Lots, would you want Brian to keep the current machine or purchase the new one? Why might Brian not prefer to make the decision that the owner of Choco-Lots desires?

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