What is the present value of a bond maturing

Assignment Help Financial Management
Reference no: EM13804432

What is the present value of a bond maturing in 20 years with a face value of $8000 and a coupon rate of 6%? Use a six months effective rate of 2%. Also draw a cash flow diagram.

Reference no: EM13804432

Questions Cloud

Plans to issue bonds to raise-flotation costs : Moms Motel Corporation (MM) plans to issue bonds to raise $175 million that it needs to support future operations. MMs investment banker will charge 2.5 percent of the total amount issued to help MM raise the funds. In addition, MM will incur other c..
How much of the issue will consist of flotation costs : Bushwhacker Mowing needs $360 million to support growth. If it issues new common stock to raise the funds, the flotation (issuance) costs will be 4 percent. If Bushwhacker can issue stock at $60 per share, how many shares of common stock must be issu..
Retirement plan guarantees to pay to you : A retirement plan guarantees to pay to you or your estate a fixed amount for 20 years. At the time of retirement you will have $73,425 to your credit in the plan. the plan anticipates earning 9% interest. Given the following information, how much wil..
Explain the steps of the user-centric design process : Compare the various types of human memory and their impact on the human-computer interface. Describe the potential outcomes of not using consistency in the human-computer interface. Summarize and explain the steps of the user-centric design process
What is the present value of a bond maturing : What is the present value of a bond maturing in 20 years with a face value of $8000 and a coupon rate of 6%? Use a six months effective rate of 2%. Also draw a cash flow diagram.
Medical professionals is considering the construction : A group of medical professionals is considering the construction of a private clinic. If the medical demand is high (i.e., there is a favorable market for the clinic), the physicians could realize a net profit of $100,000. If the market is not favora..
What was the flotation cost as a percentage of funds raised : The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $15.30 for each of the 15 million shares sold. The initial offering price was $18.00 per share, and the stock rose to $20.10 per share in the first few minutes of t..
Create a weighted ranking : Create a weighted ranking according to your own evaluation of the features and specifications of each software package
Shares of common stock outstanding : Roth Corp. wants to raise $4.4 million via a rights offering. The company currently has 540,000 shares of common stock outstanding that sell for $42 per share. Its underwriter has set a subscription price of $30 per share and will charge the company ..

Reviews

Write a Review

Financial Management Questions & Answers

  Excel spreadsheet detailing the cost of each scenario

Create an Excel spreadsheet detailing the cost of each scenario, and embed it into a Word document. Provide your recommendations in the Word document as well.

  Firm is under-valued or over-valued

A manager believes his firm will earn a 12 percent return next year. His firm has a beta of 1.2, the expected return on the market is 8 percent, and the risk-free rate is 3 percent. Compute the return the firm should earn given its level of risk and ..

  What is the amount of the free cash flow

How do I figure out this problem? Johnson's Nursery has net income of $42,500, depreciation expense of $1,800, interest expense of $900, taxes of $1,600, additions to net working capital of $2,300, and capital expenditures of $11,700. What is the amo..

  Reduce the argument in the resources allocation

Creating a portfolio and allocation resources based on the entire four project alternative which consume a lot of time however this process reduce the argument in the resources allocation.

  What is the required after-tax refunding investment outlay

Five years ago, Northwest Water (NWW) issued $40,000,000 face value of 30-year bonds carrying an 8% (annual payment) coupon. NWW is now considering refunding these bonds. It has been amortizing $4 million of floatation costs on these bonds over their..

  Stock has returns-what is the probability range

A stock has returns of 3%, 18%, -24%, and 16% for the past four years. Based on this information, what is the 95% probability range for any one given year?

  What is the value of the depreciation tax shield

A project has sales of $258,000, cost of $192,000, depreciation of $31,000, interest expense of $2,800, and a tax rate of 35 percent. What is the value of the depreciation tax shield?

  Profits and revenues and to gain access

Discuss why firms are attracted to foreign markets, for example, to increase profits and revenues and to gain access to cheaper manufacturing. How may this affect the domestic country of the firm?

  Expected net operating profit after taxes

Triptych Food Corp has an expected net operating profit after taxes, EBIT (1-T) of 13,300 million in the coming year. In addition, the firm is expected to have net capital expenditures of 1,995 million, and net operating working capital (NOWC) is exp..

  1 identify and explain three types of start ups firms give

1 identify and explain three types of start ups firms. give a illustration of one you have dealt with.2 what is a

  What is the dollar return on the partially hedged position

An endowment own $150M of bonds that has a modified duration (MD) of 8.5. Over the next 6 months they want to decrease the MD to 6.0. They can use Treasury futures contracts that mature in 6 months that have a current nominal value of $0.25M and have..

  Salary increases at average annual rate

Upon graduating from college, you make an annual salary of $66,356. You set a goal to double it in the future. If your salary increases at an average annual rate of 8.13 percent, how long will it take to reach your goal?

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