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(Yield to maturity) A bond's market price is $850. It has a $1,000 par value, will mature in 8 years, and has a coupon interest rate of 9 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 16 years? What if it matures in 4 years?
a. The bond’s yield to maturity if it matures in 8 years is ___________%. (Round to two decimal places.)
b. The bond’s yield to maturity if it matures in 16 years is ___________%. (Round to two decimal places.)
c. The bond's yield to maturity if it matures in 4 years is ___________%. (Round to two decimal places.)
Daily Enterprises is contemplating the acquisition of some new equipment. The purchase price is $31,000. The equipment has a 4-year life. The company expects to sell the equipment at the end of year 4 for $7,000. What is the incremental annual cash f..
Company’s often encounter stock splits and reverse stock splits. Why do these splits occur?
What would the annual yield to maturity be on the bond if you purchased the bond today?
An exchange call option with expiration of one year allows the owner to acquire one share of a stock A for one share of a stock B. The price of the option is $2.16. Stock A pays dividends at the continuously compounded yield of 7%. Stock B pays no di..
List and explain the appropriate financial ratios to analyze the financial performance (profitability) of Asia Paper Bag Sdn Bhd (Malay equivalent of incorporated).
A coupon bond that pays interest of $60 annually has a par value of $1,000, matures in 5 years, What is the yield to maturity on this bond?
Consider an asset that costs $974,000 and is depreciated straight-line to zero over its ten-year tax life. The asset is to be used in a seven-year project; at the end of the project, the asset can be sold for $136,000. If the relevant tax rate is 30 ..
Nodebt Inc. is a firm with all-equity financing. Its equity beta is .80. What is Nodebt’s asset beta? What is Nodebt’s WACC?
Filer Manufacturing has 8.8 million shares of common stock outstanding. The current share price is $58, and the book value per share is $3. Filer Manufacturing also has two bond issues outstanding. Suppose the company’s stock has a beta of 1.1. The r..
A proposed nuclear power plant will cost $2 billion to build and then will produce cash flows of $280 million a year for 15 years.
Bouncing Baby Foods' (BBF) balance shed shows a total of $20 million long-term debt with a coupon rate of 8.00 percent. The yield to maturity on this debt is 10.00 percent, and the debt has a total current market value of $17.5 million.
One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $510 per month. You will charge .91 percent per month interest on the overdue balance. Required: If the current balance is $14,730,..
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