What is the nominal yield of the bond

Assignment Help Financial Management
Reference no: EM13813370

Allais Company s bond has an $85 annual interest payment that will mature in 10 years at a value of $1,000. The bond has a current market price of $1,140. What is the nominal yield of the bond?

7.5%

12.4%

8.5%

 

10%

Reference no: EM13813370

Questions Cloud

Discuss the elements of zero-base budgeting : Discuss the elements of zero-base budgeting. How does it work? What are the advantages and disadvantages of zero-base budgeting? Provide a real-life example of a user of this type of budgeting.
Distinguish between the types of bonds : Distinguish between the types of bonds. What factors determine their value? Explain three important relationships that exist in bond valuation. Distinguish between preferred stock and common stock. Compare valuing preferred stock and common stock.
Common stock-risk-free rate and market return : King Farm Manufacturing Company’s common stock has a beta of 0.61. If the risk-free rate is 3.44%, and the market return is 5.95 %, calculate the required return on King Farm Manufacturing Company’s stock.
How the market would set the yield to maturity. : Blue crab, INC, plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 30- year to maturity, carry a 11.14 % annual coupon, and have a $1,000 par value. Blue crab, Inc. has determined that these ..
What is the nominal yield of the bond : Allais Company s bond has an $85 annual interest payment that will mature in 10 years at a value of $1,000. The bond has a current market price of $1,140. What is the nominal yield of the bond?
Portfolio consisting of three stocks : You want to invest $20,000 in a portfolio consisting of three stocks - Stock M, Stock D, and Stock G. The percentage investment is as follows: Stock M 40%, Stock D 35% and Stock G 25%. Expected returns for the three investments Stock M, Stock D, and ..
What would the annual yield to maturity be on the bond : Fresh Fruit, INC. has a $1000 par value bond that is currently selling for $911. It has an annual coupon rate of 11.70 %, paid semi annually, and has 28-years remaining until maturity. What would the annual yield to maturity be on the bond if you pur..
What is the current price of the bond : Marco Chip, INC. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 16 years and a yield to maturity of 13.03 %, compounded semi- annually. What is the current price of the bond?
Bonds pay an annual coupon rate : Pet food Company bonds pay an annual coupon rate of 8.10 %. Coupon payments are paid semi annually. Bonds have 5 years to maturity and par value of $1,000. Compute the value of Pet Food Company bonds if the market interest rate on this type of bond i..

Reviews

Write a Review

Financial Management Questions & Answers

  How much its current market value would be

A bank offers a three-month, $100,000 negotiable CD, which will pay a 4.4% annual interest rate. Assume that the market rate on the CD rose to 5% immediately after you purchased the CD, how much its current market value would be.

  What is the amount of the operating cash flow

United Enterprises paid $12,000 in dividends and $21,300 in interest over the past year. Sales totalled $139,700 with costs of $101,400. The depreciation expense was $10,500. The applicable tax rate is 34 percent. What is the amount of the operating ..

  What is the percentage price change of these bonds

What is the current price of these bonds? If the interest rates rise by 2%, what is the percentage price change of these bonds? If the interest rates fall by 2%, what is the percentage price change of these bonds?

  What is the price of the bond

A bond has a coupon rate of 9.8 percent and 11 years until maturity. If the yield to maturity is 8.2 percent, what is the price of the bond?

  What is the dividend growth rate

Xytex Products just paid a dividend of $2.12 per share, and the stock currently sells for $32. If the discount rate is 12 percent, what is the dividend growth rate?

  Seed them with dry ice and silver iodine particles

The Russian air force is being called on this year to intercept storms advancing on Moscow and to seed them with dry ice and silver iodine particles. The idea is to make snow drop on villages in the countryside instead of piling up in Moscow.

  Users of financial statements

Explain whether users of financial statements should exercise caution when interpreting financial statement compliant with GAAP and explain how the choice of depreciation method affects reported profits.

  What is the firms current receivables balance

Fargo Memorial Hospital has annual net patient service revenues of $14,400,000. It has two major third-party payers, plus some of its patient is self-payers. The hospitals patient accounts manager estimates that 10% of the hospitals paying patients (..

  What is the effective annual rate on this loan

You want to buy a new sports coupe for $73,900, and the finance office at the dealership has quoted you a loan with an APR of 6.3 percent for 72 months to buy the car. What will your monthly payments be? What is the effective annual rate on this loan..

  What is the present value of this investment

You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 8.08 percent, compounded annually. How much is this investment worth today? What is the present value ..

  Holders of different types of investments

Describe how the premium charged by insurers are affected by the returns available to the holders of different types of investments

  Security a has a beta of 10 and an expected return of 12

security a has a beta of 1.0 and an expected return of 12. security b has a beta of 0.75 and an expected return of 11.

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