User Account

All Pages

What is the present value of this coupon bond

Assignment Help Financial Accounting
Reference no: EM132919976

Question - Suppose you're given with the following information for some assets; a 12-year 2%-coupon bond of semi-annual  coupon payment with face value as $1,000, a common stock of $3.20 expected dividend with 2.5% growth rate currently. Both bond and common stock are issued by Company M&M. Suppose the yield to maturity (that is, the discount rate) for the bond is 10%, what is the present value of this coupon bond? Is it a discount bond? Why? What if the discount rate is 4%?

Reference no: EM132919976

Questions Cloud

What the purchase of the new equipment : The new equipment costs the company P900,000. The company uses 16% cost of capital. What the purchase of the new equipment will result to net present value
What the company return on total assets for the year : Brachlan Company's net income last year was $80,000 and its interest expense was $20,000. What the company return on total assets for the year
Determine the average insurance claim : An insurance company is reviewing its current policy rates. Originally the average claim amount was $2 100. Suppose a researcher believes that the mean claim is
Determine the size of the quarterly coupon payments : Determine the size of the quarterly coupon payments if the accrued bond interest from February 6, 2019 to March 23, 2019 is $5.14
What is the present value of this coupon bond : Suppose the yield to maturity (that is, the discount rate) for the bond is 10%, what is the present value of this coupon bond? Is it a discount bond
Compute the current price of the shares : The required return on common shares (Ke) is 16 percent. The firm has a constant growth rate (g) of 6 percent. Compute the current price of the shares
Calculate the maximum profits the firm makes : A firm's demand curve in period 1 is Q=25 - P. Fixed costs are 20 and marginal costs per unit are 5.
What do you mean by Batch Costing : What do you mean by Batch Costing? Explain the difference between Marginal Costing and Absorption Costing
Calculate Lise annual automobile taxable benefit : Of the 52, 184 kilometres driven, 27,660 kilometres were for business purposes. Calculate Lise annual automobile taxable benefit

Reviews

Write a Review

Financial Accounting Questions & Answers

  Should she hire an external forensic accountant

Mary Soto, the controller of the My Citizens Company, has gone over its inventory records many times and is concerned that one or more company employees has stolen large amounts of the company’s inventory. What should Mary Soto do? Should she contact..

  How much interest will be paid annually on these bonds

How much interest will be paid annually on these bonds? Were the bonds issued at a premium or discount? Explain your answer

  Determine the cost of equity

Common stock dividend yield, based on most recent dividend paid 2.45 percent. Using the capital asset pricing model (CAPM) approach, determine cost of equity

  Your leadership roles and community involvement

Your current school has considered you eligible for a scholarship, but demanded an application from you. Briefly explain your reasons for submitting this application.  Your personal circumstances as related to your financial need for a scholarship. Y..

  What is the difference between forecasting and budgeting

Explain what zero-based budgeting is and how it can improve the efficiency of the organization?

  Under the securities act

Under the Securities Act of 1934, which of the following intents as proof against an auditor is incorrect?

  Prepare journal entries to record the issue of debentures

Prepare journal entries to record the issue of debentures. Merle Ltd issued prospectus on 1 June 2021 inviting applications for 5,000 debentures of face amount.

  Present operating income and fair value of its net assets

Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $60,200 and net assets with a fair value of $203,000. Calculate th..

  What is the total risk of the eni share

What is the total risk of the ENI share? What is the ß coefficient of ENI? What portion of the total risk of the ENI share is explained by market risk?

  Calculate the current price of the preferred share

Cotton On Ltd. currently, Calculate the current price of the preferred share if the average return of the shares in the same industry is 10%.

  Calculate basic earning and various diluted earnings

Calculate basic earning and various diluted earnings per share for 2020. Provide your answers in a layering format showing all calculations.

  What was the beginning value of retained earnings

If net income for the year was $75,000 and a preferred stock dividend of $20,000 was paid, what was the beginning value of retained earnings?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd