What is the price of the bond

Assignment Help Finance Basics
Reference no: EM131833531

A. You are evaluating an investment in a corporate office complex. It produces a rental income stream that you believe will grow at the rate of 1% per year in perpetuity. The first year's income is $100,000 (which will be received exactly 1 year from now). If your discount rate is 8%, what would be a fair price to pay for this investment? Please enter your answer to the nearest dollar

B. A coupon bond that matures in 3 years paying an annual coupon of 8% (in semi-annual installments) with a face value of $1000 has an annual yield-to-maturity of 6%. The bond made its most recent interest payment yesterday, and so has 6 interest payments remaining. What is the price of the bond? Round the price to two decimal places (i.e. 123.45).

Reference no: EM131833531

Questions Cloud

What should be taken into consideration : Which is a better choice? What should be taken into consideration? (Support your answer with information from this week's information or cited outside sources).
Create an implementation plan for the integration of a mis : With the implementation of business analytics, an organization will also need to implement a good information systems plan in order to collect.
What is the equity multiplier : What is the company's total asset turnover? What is the equity multiplier?
Determine the probability that in any given year : Use the NORMDIST function in Excel® to determine the probability that in any given year you will lose money by investing in this asset.
What is the price of the bond : What is the price of the bond? Round the price to two decimal places (i.e. 123.45).
Discuss how to access team productivity : Discuss how to access team productivity: What conditions need to be in place for teams to excel and why?
Determine which has a higher roi : Using net present value calculations, determine which has a higher ROI. Assume the average mileage under both options is 15,000 miles.
List and describe the contemporary models of leadership : List and describe the contemporary models of leadership. What distinguishes them from past models?
Identify which financing option is the best option : Identify which financing option you think is the best option for SunsTruck to pursue given Shaun's constraints.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate thelma and louie net income for the year

The company paid dividends of $33 million to the preferred stockholders and $73 million to common stockholders. Calculate Thelma and Louie's net income for the year.

  How many shares are there currently before the offering

The company is seeking $15 million in additional funds with a per-share subscription price equal to $50. How many shares are there currently, before the offering? (Assume that the increment to the market value of the equity equals the gross procee..

  Is counting the number of taxable estates collect a good way

According to a New York Motu columnist, "The estate tax affects a surprisingly small number of people. In 2003, just 1.25 percent of all deaths resulted.

  What role does communication play in this scenario

What could HR do to ensure a harmonious work environment?

  Suppose a company will issue new 20-year debt with a par

cthe correct answer for this question is 5.57. i need to know how that answer was

  Accountant for scenic photographic supply company

The accountant for Scenic Photographic Supply Company has established the following overhead cost pools and activity drivers.

  The dividend growth rate is expected to be 15 for 2years

company zzs last dividend paid was 1.00 do 1.00.nbsp the dividend growth rate is expected to be 15 for 2years after

  Assume payments are made at the end of quarter

What quarterly payment is necessary to accumulate $9340000 over 11 years if the annual interest rate is 8% compounded quarterly?

  Description of the operating profit margin

Choose a public company, and present findings from your financial analysis in a report. Your report must include the following:

  Describe weighted average cost of capital

Describe the entire process of finding the Weighted Average Cost of  Capital - Difference between the types of inventory and inventory management systems used by firms and explain what determines the optimal inventory level.

  Bruce invests 2000 in a mint condition nolan ryan baseball

bruce invests 2000 in a mint condition nolan ryan baseball card. he expects the baseball card to increase 20 a year for

  Find the amount of goodwill

Jack corporation paid $800,000 for all of Ann company issued and outstanding common stock. Ann's recorded assets and liabilities on April 1, 20X2, were as follows:

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