What is present worth of the dividend savings to epwu rate

Assignment Help Finance Basics
Reference no: EM13881866

In 2011, El Paso Water Utilities (EPWU) issued bonds worth $9.125 million to improve the Van Buren dam in central El Paso and to finance three other drainage projects. The bonds were purchased by the Texas Water Development Board under the federal stimulus program wherein EPWU did not have to pay any dividend on the bonds. If the bond dividend rate would have been 4% per year, payable quarterly, with a bond maturity date 18 years after issuance, what is the present worth of the dividend savings to EPWU rate payers? Assume the market interest rate is 6% per year.

Reference no: EM13881866

Questions Cloud

What was the semiannual interest rate when bonds were sold : Because the market interest rate increased immediately before the bonds were sold, the city received only $23.5 million from the bond sale. What was the semiannual interest rate when the bonds were sold?
Can investors accurately forecast the direction of future : Provide one reason for using the bank's investment portfolio to speculate on interest rate movements. Provide one reason against such a strategy. What do you believe about efficient markets, and how does this influence your opinion of speculating? Ca..
Emergency and disaster management : The use of training exercises in preparing for disaster scenarios is an important component of any emergency preparedness plan
What specific strategies might the investment manager pursue : Suppose that a bank's ALCO reports that the bank is too liability sensitive; that is, earnings will fall more than desired should rates rise. You have been asked to reduce the bank's earnings sensitivity. What specific strategies might the investment..
What is present worth of the dividend savings to epwu rate : If the bond dividend rate would have been 4% per year, payable quarterly, with a bond maturity date 18 years after issuance, what is the present worth of the dividend savings to EPWU rate payers?
Safest conditions are achieved by lowest temperature : (a) The safest conditions are achieved by the lowest temperature and pressure in the flash vessel. (b) Vapor flow to downstream equipment can cause a hazardous situation.
Spill response and cleanup problems associated with water : Explain the spill response and cleanup problems associated with water-soluble liquids
How would you go about estimating the unknowns : Regression through the origin. Consider the following regression through the origin: Yi = βˆ2 X2i + βˆ3 X3i + uˆ i      - How would you go about estimating the unknowns?
What is the present worth now of one bond : If the bond maturity date is 20 years from the date they were issued and the interest rate in the marketplace is now 12% per year, compounded semiannually, what is the present worth (now) of one bond?

Reviews

Write a Review

Finance Basics Questions & Answers

  Problem related to motivation strategies

Did management seem to apply Theory X or Theory Y for their motivation strategies? Or did they use elements of both? What needs in Maslow's hierarchy does management at your organization try to address?

  What should the price of the same headphones be in mexico

what should the price of the same headphones be in Mexico.

  If reserve requirements were eliminated in the future as

if reserve requirements were eliminated in the future as some economists advocate what effects would this have on the

  What is an amortization schedule

Would you rather have a savings account that paid interest compounded on a monthly basis, or one that compounded interest on an annual basis? Why?

  What do investors expect the dividend growth rate to be

A company paid dividend of $2.00 per share,and investors believe that the dividend will increase at a constant rate into the foreseeable future.The price of stock is currently $65.00 per share.

  New consultants on the impact of the sarbanes

You have been assigned to train new consultants on the impact of the Sarbanes-Oxley Act of 2002 on financial reporting.

  How much interest would you have to pay in the first year

Suppose you borrowed $12,000 at a rate of 9% and must repay it in 4 equal installments at the end of each of the next 4 years. How much interest would you have to pay in the first year?

  How much will wcmc receive from this offering

The company will sell 10 million sharesat an offering price of $25 per share, the underwriting will charge7% underwriting fee, & the shares are expected to sell for $32per share by the end of the first day trading.

  Correct statements regarding fiduciary responsibility

Determine the correct statements regarding fiduciary responsibility.

  What are the weights of apple and costco

If you hold a portfolio composed of Apple stocks and Costco stocks and you have 100 shares of Apple and 200 shares of Costco. Apple stocks are trading at $189 per share and Costco stocks are trading at $112 per share. What are the weights of Apple..

  Find which of the following is a correct description of

1.which of the following is a consequence of the way in which the ferris home is titled?a. either spouse can dispose of

  Using the graph andintuition determine whether there is a

based on what you have learned from your research on regression analysis and correlation answer the following questions

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