What is the current market rate on this bond

Assignment Help Financial Management
Reference no: EM13947099

A 25-year bond was issued eight years ago. The bond pays an annual coupon rate (once a year) of 8.75%. Currently, the bond sells for $1,210. What is the current market rate on this bond?

Reference no: EM13947099

Questions Cloud

What is the value per share of the merged firm : Larry's Buffet is planning on merging with Frank's Diner. Larry's will pay Frank's shareholders the current value of their stock in shares of Larry's Buffet. Larry's currently has 4,600 shares of stock outstanding at a market price of $31 a share. Fr..
Regulate the insurance industry : Which level of government do you think should regulate the insurance industry, the various states or the federal government? Explain in detail your reasoning. Why do younger people prefer HMO's while older people prefer traditional insurance or PPO. ..
What would layla monthly payment on the new loan be : Layla has owned her home for 12 years and expects to live in it for 5 more years. She originally borrowed $200,000 at 5% for 30 years to buy the home. She still owns $130,000 on the loan, interest rates have fallen to 4%, and Layla is reconsidering r..
Return on equity-what is the firms net income : Alpha Corporation has a return on equity (ROE) of 18.70 percent, an equity multiplier of 2.50, sales of $2,750,000, and a total assets turnover of 2.75. What is the firm's net income?
What is the current market rate on this bond : A 25-year bond was issued eight years ago. The bond pays an annual coupon rate (once a year) of 8.75%. Currently, the bond sells for $1,210. What is the current market rate on this bond?
What is the estimated growth rate for this perpetuity : N&H Enterprises is valued at $787.5 million. Last year, it generated $30 million of cash flow. The appropriate discount rate on N&H's cash flow is 9%. What is the estimated growth rate for this perpetuity?
Equity using the dividend growth model : The Devon Corporation just paid a dividend of $1.25. Its current stock price is $40. The anticipated growth rate is 12%. What is the cost of Devon's equity using the dividend growth model?
Retired before receiving the remaining payments : Ogden Mear did an excellent job saving for retirement. He was able to save $1,000,000 in an account that pays 5 percent per year. His plan was to eventually withdraw all his money by paying himself in equal installments every six months for the next ..
Paid dividend and it expects that dividend to grow : Crazee Enterprises Corporation just paid a dividend and it expects that dividend to grow by 10 percent for the next three years. After that, the dividend is expected to grow at a constant rate of 5 percent in perpetuity. If the company's stock is cur..

Reviews

Write a Review

Financial Management Questions & Answers

  With a quoted interest rate

With a quoted interest rate of 5% and a 10% compensating balance, what is the effective rate of interest (use $200,000 loans proceeds amount) 2. With the average accounts receivable of $5 million and credit sales of $24 million, you factor receivable..

  Contest sponsors have to deposit in the escrow account

The super prize in a contest is $10 million. This prize will be paid out in equal yearly payments over the next 10 years. If the prize money is guaranteed by AAA bonds yielding 3%and is placed into an escrow account when the contest is announced 1 ye..

  It cost you to buy seat if company uses straight votind

After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only person voting for you. If Schenkel has 445,000 shares out..

  What type of inventory does a farmer need

Why do firms or individuals involved in farming need to borrow? What type of inventory does a farmer need?

  Current market price of stock reflects its intrinsic value

The stock of Nogro Corporation is currently selling for $24 per share. Earnings per share in the coming year are expected to be $6. The company has a policy of paying out a fraction of 0.6 of its earnings each year in dividends. Assuming the current ..

  What rate must be quoted to the customer

A payday lender makes a loan to a customer. The customer is given $200 today and she must repay $230 in two weeks to the lender. What rate must be quoted to the customer? An investment banker agrees to a firm commitment offering of 1.2 million shares..

  Currency appreciation is good for country

“A currency appreciation is good for a country, and currency depreciation is bad”. Please comment on this statement. Does this require a particular exchange rate regime? A level of International Reserves?

  One mutual fund that reflects your investment style

You will be developing a simple portfolio that will be used for analysis over the following five weeks. This will also be used in your in-depth analysis of the entire portfolio for the Week Six Final Paper. You are given $10,000 to allocate to a port..

  Bonds make semi annual payments

Ngata Corp. issued 16-year bonds 2 years ago at a coupon rate of 9.5 percent. The bonds make semi annual payments. If these bonds currently sell for 99 percent of par value, what is the YTM?

  Cost of equity with and without flotation

avits & Sons' common stock currently trades at $25.00 a share. It is expected to pay an annual dividend of $2.75 a share at the end of the year (D1 = $2.75), and the constant growth rate is 6% a year. What is the company's cost of common equity if al..

  What is the payment for the monthly debt service

Danny Developer seeks secondary financing, a $750,000 mortgage, term 25 years, interest rate is 13.5% and payments include principal and interest with level monthly payments. What is the payment for the monthly debt service? What is the mortgage bala..

  What is the current dividend yield

The expected dividend payment next year of Extra Bounty Corporation will be $5.00 per share and expected to grow at a constant rate of 3.5% indefinitely. The investors require a rate of return of 8.25% on this stock. How much would you pay for this s..

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