What is the expected price of the bond

Assignment Help Financial Management
Reference no: EM132006484

a. CVC Inc.'s bonds mature in 7 years, have a par value of $1,000, and a coupon rate of 8% paid semi-annually. The market interest rate for the bonds is 9%. What is the expected price of the bond?

a. $1,084.81 b. $948.89 c. $969.96 d. $994.21 e. $944.30

b. You plan to retire in 40 years. If you deposit $500 into your investment account at the end of every year during the 40-year period, what is the account balance at the time when you retire? The account carries an interest rate of 3%.

a. $37,671.87

b. $37,682.65

c. $37,700.63

d. $37,690.87

Reference no: EM132006484

Questions Cloud

What might have affected the results : Paragraph 2: what might have affected those results (i.e., threats to internal and external validity). Include flaws in your design and confounding variables.
Worsening economic outlook : You believe that the risk free rate then will remain at 4% but the market risk premium is like to rise to 10% due to a worsening economic outlook.
Access the allied health community media : Changes must be initiated that enhance employee productivity and support the clinic in showing a positive financial gain.
Price of the stock appreciates or depreciates : 1. For each scenario, indicate whether the price of the stock appreciates or depreciates, and calculate your investment return.
What is the expected price of the bond : The market interest rate for the bonds is 9%. What is the expected price of the bond?
Give the lender at the end of the year : a) How much money will the company give the lender at the end of the year?
What is amnesia in regards to memory : So you say you are going to college to learn. Can you explain just what this means in terms of brain structure and chemistry.
What is the target share price five years from now : What is the target share price five years from now?
What is the bond coupon rate : The coupon payments are paid semiannually. The bond is selling at the price of $850. What is the bond's (annual) coupon rate?

Reviews

Write a Review

Financial Management Questions & Answers

  What amount must you donate to endow the scholarship

If the school's endowment discount rate is 7%. what amount must you donate to endow the scholarship?

  Computing the tax savings from leasing expense

Computing the tax savings from leasing expense is. The physical location where the service will be provided is information located in the plan's:

  Consistent with the bird-in-hand dividend theory

Which of the following statements would be consistent with the bird-in-hand dividend theory?

  The present value of an ordinary annuity

Complete the following for the present value of an ordinary annuity. Do not round intermediate calculations. Round answer to nearest cent. Amount of annuity expected $900 payment annually for 4 years at an interest rate of 6% what is the present valu..

  Which decision is in kims best interest

Kim is a dvisional manager at General Rotors. Her compensation is based on the division's net income and she plans to retire in a year.

  Issue of preferred stock outstanding

Moraine, Inc., has an issue of preferred stock outstanding that pays a $6.55 dividend every year in perpetuity. If this issue currently sells for $91 per share, what is the required return?

  How much is the stock currently over or under priced

Based on a three-year investment horizon and assuming that all your estimates are correct, how much is the stock currently over or under priced?

  Component cost of firm preferred stock consists

The component cost of a firm's preferred stock consists of:

  What is the expected return-what is the realized returned

At the beginning of? 2007, Apple's beta was 1.2 and the? risk-free rate was about 5.4%. What is the expected return? What is the realized returned?

  What is the percentage increase in the value of stock

Trivia soft is currently unlevered tc=40% the board has approved b/s ratio of 400%. Proceeds of new debt will be used to buy back stock. Tax savings will increase the value of stock. What is the percentage increase in the value of stock?

  The sustainable growth rate represents

The sustainable growth rate represents the ____ rate at which a firm can grow:

  What is the value of the firm

You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.6, a debt-to-equity ratio of .3, and a tax rate of 30 percent. Assume a risk-free rate of 5 percent a..

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