What is the percentage change in carter bond value

Assignment Help Financial Management
Reference no: EM132012682

Milner's Tools has a 9-year, 7 percent annual coupon bond outstanding with a $1,000 par value. Carter's Tools has a 10-year, 6 percent annual coupon bond with a $1,000 par value. Both bonds currently have a yield to maturity of 6.5 percent. If the market yield increases to 6.75 percent,

(1) What is the percentage change in Milner’s bond value?

(2) What is the percentage change in Carter’s bond value?

(3) Whose bond has higher interest rate risk? Why?

Reference no: EM132012682

Questions Cloud

Tax deferred retirement plan : A man earned wages of $36,300, received $2,200 in interest from a savings account, and contributed $3,700 to a tax deferred retirement plan.
Which alternative would you choose in given case : You are negotiating for the terms of a legal settlement, and your opponent's attorney has presented you with the following alternative settlement alternatives.
Explain the underdevelopment of africa : Which theory has more credibility, Out of Africa or Multiregional World? Being specific, why?
What is the monthly payment : Consider a home mortgage of $250,000 at a fixed APR of 6% for 15 years. What is the monthly payment?
What is the percentage change in carter bond value : What is the percentage change in Milner’s bond value? What is the percentage change in Carter’s bond value?
Should project accept based on profitability index criterion : Nelson's Industrial Supply is considering a project that has projected cash inflows of $6,000 a year for 4 years. The initial cost of the project is $16,800.
What is the total return percentage : What is the total return percentage? What is the annual return percentage?
Calculate the total present value of these payments : Calculate the total present value of these payments if the interest rate is 12% compounded semi-annually.
What is the balance in the account after five years : What is the balance in the account after five years? what is the balance in the account after 20 years? The APY for the account is?

Reviews

Write a Review

Financial Management Questions & Answers

  The foundational ethical theories

discuss the issues and set forth and defend a clear position on whether or not any constraint ought to be placed on the freedom of a business to:

  Secret desire is to write best-selling novel

Although K is currently a systems analyst for 3L Corporation, her secret desire is to write a best-selling novel. To this end, she purchased a computer for $3,000 this year. She used the computer only for writing her novel. Can she deduct the entire ..

  What will be the price of stock on the ex-dividend date

What will be the price of the stock on the ex-dividend date if the dividend is declared?

  Construction project to evaluate costing

You have a construction project to evaluate costing 10,000,000 for construction on a 1,000,000 piece of land.

  Calculate the cost of equity using dividend growth model

Laverne Industries stock has a beta of 1.35. The company just paid a dividend of $.85, and the dividends are expected to grow at 5 percent. The expected return of the market is 11.5 percent, and Treasury bills are yielding 5 percent. The most recent ..

  What is the expected return of the portfolio

What is the standard deviation? What is the variance of this portfolio? What is the expected return of the portfolio?

  What is sell the old-net of tax and buy the new value

The ABD company is considering the purchase of a new machine to replace an out of date machine that has a book value of $18000 and can be sold today for $2,000. The old machine is being depreciated on a straightline basis over 4 more years to a book ..

  Compute the net cash flow

A U.S. firm is expected to receive a floating rate of (LIBOR+125 bps) on €5 million for four years. Payments will be made annually. The current exchange rate is $1.06 / €. The company wants to hedge its interest rate risk so it enters into a swap: re..

  Graduates earn same returns in future as in the past

Zora and Nelson, who are recent graduates of the prestigious MBA program at Meredith College, have each received $10,000 as graduation gifts. Zora and Nelson share the same birthday and they are both 30 years old. If the two graduates earn the same r..

  The secondary markets for many types of debt securities

Explain why the credit crisis caused a lack of liquidity in the secondary markets for many types of debt securities?

  Determine the average monthly cost of servicing

Determine the average monthly cost of servicing the typical student's demand deposit account, which generates 27 withdrawals (15 electronic), two transit checks deposited, two transit checks cashed, two deposits (one electronic), and one on us check ..

  Using the percent of sales method-projected current assets

The chief financial officer of AJAX Industries expects sales to increase from $8,000,000 in 2010 to $12,000,000 in 2011. Current assets in 2010 are equal to $5,000,000. Using the percent of sales method, projected current assets for 2011. Please show..

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