What is the present value of this bond

Assignment Help Financial Accounting
Reference no: EM133003488

Question - For purposes of this exercise, assume that UPS issues a new ten-year bond for $100,000 (Face Value) that will mature in 2027 (10-Years). The Future Value of this bond is therefore $100,000. The bond was issued in December 2017 at a market interest rate of 5.0% fixed for 10 years, with interest payments made semi-annually (Note: The payment never changes even if the original rate of 5% increases or decrease). What is the Present Value of this bond using the three scenarios in Part II: Bond Issuance.

Assuming this company already has bonds outstanding, calculate the following:

1. The new value of the bond if overall rates in the market increased by 2%.

2. The new value of the bond if overall rates in the market decreased by 2%.

3. The value of the bond if overall rates in the market stayed exactly the same.

Reference no: EM133003488

Questions Cloud

Find what should company record as impairment loss on july : Find what should company record as an impairment loss on July 1, 2021, if there is no active market for the machine and the firm has no plans to dispose of it?
Prepare the journal entries to record each case : Expenditures amounting to P150,000 were paid to the government for special assessment made to the lot. Prepare the journal entries to record each case
Find how much impairment loss should be recognized : Determine how much impairment loss should be recognized. The firm's operations have suffered substantial losses over the last two years.
Determine total sales revenue juniper needs to break even : Determine the sales revenue from each product needed to generate a profit of $105,600. Determine total sales revenue Juniper needs to break even.
What is the present value of this bond : For purposes of this exercise, assume that UPS issues a new ten-year bond for $100,000. What is the Present Value of this bond
How profit is distributed to partners : How profit is distributed to partners (show supporting schedule of profit distribution) under the 10% interest based on beginning capital is provided.
What would be the total predetermined overhead rate : Assume that Dean's denominator activity for the year is set at 80% of capacity. What would be the total predetermined overhead rate
How much cash flow was invested in long-term assets : How much cash flow was invested in long-term assets by Carla Vista during 2017? Carla Vista Construction had long-term assets before depreciation.
Calculate book value of an asset for genetic insights co : Calculate book value of an asset for Genetic Insights Co. Genetic Insights Co. purchases an asset for $14,706. This asset qualifies as a seven-year recovery.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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