What is the current yield of coupon bond

Assignment Help Financial Management
Reference no: EM131058482

1. What is the current yield of a 12.4% coupon bond with 20 years to maturity, if the bond is selling for 901.55?

2. Buck buys a bond with an 8.2% coupon and has a current yield of 8.79%. How much did he pay for the bond?

3. Which of the following bonds offer the highest current yield?

A. 12.84%, 20 year bond, current price 104.139 B. 21.40%, 15 year bond, current price 173.565 C. 6.42%, 18 year bond, current price 52.070

Reference no: EM131058482

Questions Cloud

What is NPV for the project if the required return : A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow 0 –$ 28,800 1 12,800 2 15,800 3 11,800 What is the NPV for the project if the required return is 10 per..
Maximize performance in sport : For this thread, select a favorite sport and discuss how biomechanics impacts the game. Answer the following questions: How can biomechanics be used to maximize performance in this sport? What forces are at play in this sport that biomechanics are..
What are the underlying root problems in given case study : What surface problems do you notice? What are the underlying root problems? What actions would you recommend Edna to take? Create your discussion using the 4 key steps of a Case Study.
Discount model-what should be budweiser stock price : You expect Budweiser will pay dividends of 1.50 in one year, 2.50 in two years, and 3.50 in three years. From that point onwards, dividends will grow at 5% per year. Investors' required rate of return is 12%. According to the Dividend Discount Model,..
What is the current yield of coupon bond : What is the current yield of a 12.4% coupon bond with 20 years to maturity, if the bond is selling for 901.55? 2. Buck buys a bond with an 8.2% coupon and has a current yield of 8.79%. How much did he pay for the bond?
Calculate the cross-price elasticity of demand for gas : Use comparative static analysis to illustrate (that means draw graphs) and describe what should happen to the equilibrium price and quantity in the markets for wild salmon and the Languedoc white wine, given just this information. Be specific but ..
The history of changes of fbt on motor vehicles : How car benefits are taxed? (also give reasons for the 2 methods) and the history of changes of FBT on motor vehicles
What was the arithmetic average return : You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 19 percent, –13 percent, 16 percent, 21 percent, and 10 percent. What was the arithmetic average return on Crash-n-Burn’s stock over this five-year perio..
Example on how to write a literature review : Example on how to write a literature review. Topic diabetes. Information obtained through school library.

Reviews

Write a Review

Financial Management Questions & Answers

  How many percent return-loss will your company

A project will cost $4,819,724 and its expected to earn zero after one year, but $3,009,913 at the end of the second year, and $2,779, 333 at the end of the third year. and they generally want a return of 15% per year. Corporate tax rate is at 37%. I..

  What would be your capital budget

The Acme Chip Manufacturing Company (potato not computer) has a target capital structure of 40% debt and 60% common equity. They also have a 40% tax rate. They have three projects under consideration code named: What would be your capital budget? The..

  Dividend is expected to grow at constant rate

Hart Enterprises is expected to pay a $0.50 per share dividend one quarter from today. The quarterly dividend is expected to grow at a constant rate of 1% per quarter. Suppose you require a effective return of 12% a year. How much are you willing to ..

  True regarding payment and the place for delivery

Which of the following is true regarding payment and the place for delivery if those terms are left open under the UCC?

  Target debt-equity ratio

Benjamin Manufacturing has a target debt-equity ratio of .63. Its cost of equity is 13.7 percent, and its cost of debt is 8.7 percent. Required: If the tax rate is 30 percent, what is the company’s WACC?

  Ordering cotton underwear for ace retail stores

The purchasing agent responsible for ordering cotton underwear for Ace Retail Stores has come up with the following information:Sol:

  What is the projects expected rate of return

If a security plots below the security market line, it is: A project has an assigned beta of 1.24, the risk-free rate is 3.8%, and the market rate of return is 9.2%. What is the project's expected rate of return? A project with higher than average ri..

  What is the price of the bonds

Doisneau 22 year bonds have an annual coupon interest of 8%, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with a market’s required yield to maturity of 14%, are these premiums or discount bonds? ..

  What is margin of safety

Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $81,100. Swimkids expects sales of $288,000 next year. What is Swimkids's margin of safety?

  Issued perpetual preferred stock valuation

Ezzell Corporation issued perpetual preferred stock with a 8% annual dividend. The stock currently yields 10%, and its par value is $100. What is the stock's value?

  About the retirement goal

Your retirement goal is to save $400,000 by the time you are 65 years old. You have been saving $926.65 per year for the last 30 years, and you will retire in 5 years (at age 65). The interest rate has just changed from 12% (which has been the level ..

  Calculate the operating cash flows for the new project

Assume that a new project will annually generate revenues of 1,800,000 and cash expenses (including both fixed and variable costs) of 600,000 while increasing depreciation by 190,000 per year. In addition, the firm’s tax rate is 37%. Calculate the op..

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