What is the current price of the bond

Assignment Help Business Management
Reference no: EM132343699

Assume that a bond makes 10 equal annual payments of $1,000 starting one year from today. The bond will make an additional payment of $100,000 at the end of the last year, year 10. (This security is sometimes referred to as a coupon bond.)

If the discount rate is 3.5% per annum, what is the current price of the bond? (Hint: Recognize that this bond can be viewed as two cash flow streams: (1) a 10-year annuity with annual payments of $1,000, and (2) a single cash flow of $100,000 arriving 10 years from today. Apply the tools you've learned to value both cash flow streams separately and then add.)

Reference no: EM132343699

Questions Cloud

Qualitative and quantitative comparison : As we have learned throughout this course, quantitative techniques focus on breadth and generalizability, while qualitative techniques focus on depth
What is the amount of the total risk premium : What is the amount of the total risk premium that Voice River will have to pay?
What is the price of a share of stock : What is the price of a share of stock if the beta is? 1.5, its next dividend is projected to be $3.50?, and its growth rate is expected
Describe the role of the g20 in global business : BUSI2011 - Describe the role of the G20 in global business. Has this always been the case and what was the most significant decision the G20 has made
What is the current price of the bond : If the discount rate is 3.5% per annum, what is the current price of the bond? (Hint: Recognize that this bond can be viewed as two cash flow streams
Analyse factors that will impact on the organisation : R/503/5211-Developing Organisational Vision and Strategic Direction-ATHE Level 7 Qualifications in Management-Assess the role of key stakeholders in relation.
What rate of return are you earning on the loan : What rate of return are you earning on the loan? Round to two decimal places.
Analyse the impact of organisational objectives : A/503/5350-Personal Leadership and Management Development-ATHE Level 7 Qualifications in Management-Analyse the impact of organisational objectives.
How much would bob need to save annually : How much would Bob need to save annually over the next 25 years assuming he earns 6% interest?

Reviews

Write a Review

Business Management Questions & Answers

  Sample data for parts and for suppliers

1. The table below contains sample data for parts and for suppliers who provide those parts.  In discussing this data with users, we find that part ID, but not names, uniquely identify parts and that supplier names uniquely identify suppliers.

  Sponsorship of the team

Within days of Donald Sterling's (former owner of the LA Clippers basketball team), racist comments, several sponsors immediately canceled their sponsorship.

  Positive change within an organization

Brie?y describe how adherence to servant leadership can in?uence positive change within an organization

  What are the major challenges and limitations for tfc

What are the major challenges, problems, and limitations for TFC according to the case? Based on reading, please answer the following sub questions: a. Please compare and contrast the pros and cons of each segmentation strategies.

  How do leaders measure and validate the change process

How do leaders measure and validate the change process?

  Human resources to projects and services in dynamic project

Read the "Allocating Human Resources to Projects and Services in Dynamic Project Environments" by Momeni and Martinsuo then compose a formal,

  Principles associated with proper research methods

How can understanding the principles associated with proper research methods (information utilization) help you academically and professionally?

  What is your annual household discretionary income

What is your annual household discretionary income, has this income changed during the last three years, and what were the principal causes of these changes?

  What should business managers do to protect organizations

What are some special issues that arise in Internet transactions involving contracts as compared to traditional transactions involving contracts? What should business managers do to protect their organizations in Internet transactions

  Spreadsheet modelling

The initial project measured the production rate trend to identify the potential reasons of concern.

  What is the role of ethics in negotiation

What is the role of ethics in negotiation? How does organizational culture affect ethics in a negotiation? Very confused.

  Application of incremental costing

How do you analyze the "Peak Pricing: An Application of Incremental Costing" from Chapter 9 example and compare this example of peak and off-peak

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