What is current value of his bonds

Assignment Help Financial Management
Reference no: EM132015966

Ten years ago Franky Frugal bought some 20-year treasury bonds for $200,000. The bonds will pay $4900 per year for 20 years, and at the end of 20 years he will receive his last payment plus his original $200,000 back. Unfortunately Franky's wife is really ill, and he needs all of the money he can get to pay his bills. He decides to sell his bond. The current rate on a 10-year T-bond is 6.68% per year. What is the current value of his bonds?

Reference no: EM132015966

Questions Cloud

Firm is considering purchasing computer system : A firm is considering purchasing a computer system. The following data has been collected.
What does price earnings ratio : What does a price earnings (PE) ratio of 18 mean?
Calculate your net proceeds : You sell 300 shares of stock at a price of 67.88 and incur brokerage fees totaling $214. Calculate your net proceeds.
What is the present value of the comic book franchise : What is the present value of the comic book franchise if the discount rate is 14% per year?
What is current value of his bonds : He decides to sell his bond. The current rate on a 10-year T-bond is 6.68% per year. What is the current value of his bonds?
What will the total amount of your annual dividend be : If you own 300 shares of common stock in Happy Corporation, what will the total amount of your annual dividend be?
Calculate their weighted average cost of capital : In computing the cost of capital, which sources of capital should be considered? Why do firms calculate their weighted average cost of capital?
Decide between two mobile phone carriers : Tyler is trying to decide between two mobile phone carriers. The equivalent monthly cost for Carrier A is.
Risk of interest swap and default risk of currency swap : Compare the difference between default risk of interest swap and default risk of currency swap. Which one is larger? Justify your answer.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the value of a call with strike price

what is the value of a call with strike price K = $1 and maturity one month, i.e. T = 1/12?

  Assume an applicable interest rate

Suppose you have sold your rare Babe Ruth rookie card for $185,000. The dealer you sold it to gave you $100,000 today and signed a contract to pay you the remaining $85,000 in increments of $5,000 monthly, starting at the end of the current month. Wh..

  Calculate the bond price include settlement date ,\maturity

In February 2009 Treasury 6s of 2026 offered a semiannually compounded yield of 3.5965%. Recognizing that coupons are paid semiannually, calculate the bond's price. Include settlement date, maturity date, coupon rate, YTM and Price. In February 2009 ..

  The share price after the stock dividend

What will be the amount of shares outstanding and the share price after the stock dividend.

  Compute operating characteristics of customer waiting line

Agan Interior Design provides home and office decorating assistance to its customers. In normal operation, an average of 2.5 customers arrives each hour. Compute the operating characteristics of the customer waiting line, assuming Poissonarrivals and..

  Level of economic development and industry sectors

Provide basic information about its economy. For example, level of economic development, industry sectors, comparative advantage and international trade,

  Financial environment after financial markets collapsed

Federal Reserve Board take to stabilize the financial environment after the financial markets collapsed in 2007–2008?

  What is the appropriate price or present-day value

What is the appropriate price, or present-day value (PDV), of a share of stock that has a constant yearly dividend of $1, if the market interest rate (i) is 2%?

  Stock exceed the required return on the less risky stock

By how much does the required return on the riskier stock exceed the required return on the less risky stock?

  Whats its turnover ratio

An open end mutual fund has average daily assets of $3.4 billion during the year. It sold $1.25 billion worth of stocks and bought $1.4 billion worth of stocks during the year. What’s its turnover ratio? Explain the difference between an open end fun..

  Benefit-cost ratio and the return on investment

A proposed wind project would require an initial investment of $1.5 million. Estimate the simple payback period, benefit-cost ratio and the return on Investment

  Calculate the fraction of your salary to be saved

calculate the fraction of your salary to be saved. The first tuition payment is at the end of year 15.

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