What is the present value of the bond

Assignment Help Microeconomics

Reference no: EM13498388

Question 5

Suppose that there is a bond that will pay $500 for each of the next three years (the first payment is one year from now). At the end of three years the bond matures and the holder receives the $10,000 face value of the bond. If the market rate is 4%, what is the present value of the bond?
Answer

9,867.44

10,277.21

11,123.22

11,687.17
10 points
Question 6

Suppose that you currently have $2000 deposited in a savings account that earns 1.25% interest. Approximately, how many years must you wait before you have $4000?
Answer

10

24

32

56
10 points
Question 7

Suppose that Manisa Co. is currently not paying any dividends, but is is known that starting in four years (i.e. the first payment is four years from now), Manisa will begin paying $2 a share. The interest rate is 4%. In three years time, what will be the price of Manisa Co. shares?
Answer

37.50

48.07

50

75

Reference no: EM13498388

Questions Cloud

Explain the initial temp of the water in degrees celcius : The temperature of 50g of water was raised to 60 degrees C. by the addition of 4100 joules of heat energy. What was the initial temp. of the water in degrees Celcius?

Calculate carolines taxable income for the year : Caroline is a 55-year-old Australian resident. She is the chief marketing officer based in Sydney for XYZ Limited (XYZ), a public company listed on the Australian Securities Exchange (ASX).

A typical indifference curve for ryszard is drawn in black : Ryszard consumes two goods, x and y. His utility function is given by u = 4 + x for y >= 4 and by u = x + y for y

Explain cannon-boring piece of equipment generates heat : Count Rumford observed that nine burning candles generate heat at the same rate that a single horse driven cannon-boring piece of equipment generates heat.

What is the present value of the bond : Suppose that there is a bond that will pay $500 for each of the next three years (the first payment is one year from now). At the end of three years the bond matures and the holder receives the $10,000 face value of the bond. If the market ra..

Explain ammonia using the standard enthalpies of formation : Find N-H bond energy in ammonia using the standard enthalpies of formation N(g)=472,7kJ/mol, H(g)=216.0kJ/mol, NH3(g)=-46.1kJ/mol

Explain iron is added to a solution of iron iii sulfate : Powdered Iron is added to a solution of Iron III sulfate, what happens. Please provide a narrative explanation.

Compare the after-tax annual costs : Machine A has been completely overhauled for $9000 and is expected to last another 12 years. The $9000 was treated as an expense for tax purposes last year. Machine A can be sold now for $30,000 net after selling expenses

Explain what is the molarity of the acid solution : If 26.55 mL of a standard 0.1650 M NaOH solution is required to neutralize 31.69 mL of H2SO4, what is the molarity of the acid solution

User Account

All Pages