What is the price of the bond

Assignment Help Finance Basics
Reference no: EM132139859

A 10 percent annual coupon rate bond pays interest semi-annually. Par value is $1,000. It has three years to maturity. Investors' required rate of return is 12 percent. What is the price (present value) of the bond?

Reference no: EM132139859

Questions Cloud

How could you make an arbitrage profit if the coupon : How could you make an arbitrage profit if the coupon bond were trading at $100?
Calculating annuity present values : Calculating annuity present values. Beginning three months from now, you want to be able to withdraw $2,500 each quarter from your bank account
How much money did the attorney think he had in his account : How much money did the attorney think he had in his account before he learned of the fraud?
Determine the bond price elasticity : The required rate of return on a certain bond changes from 12 percent to 8 percent, causing the price of the bond to change from $900 to $1,100.
What is the price of the bond : Investors' required rate of return is 12 percent. What is the price (present value) of the bond?
What rate of return will william earn on this investment : William will hold the bond until it matures. What rate of return will William earn on this investment?
Difference between systematic versus unsystematic risk : What is the difference between systematic versus unsystematic risk?
Sensitivity of npv to changes in quantity supplied : What is the sensitivity of NPV to changes in quantity supplied? (Do not round intermediate calculations and round your final answer to 2 decimal places.
Construct an amortization schedule : Construct an amortization schedule for the $300,000 loan with a 3.5% interest rate compounded monthly. The loan will be paid back in 15 years making monthly pay

Reviews

Write a Review

Finance Basics Questions & Answers

  Determine the maximum amount the company willing to pay

A company is considering the purchase of a system that will reduce annual operating costs by $10,000 per year for the next 15 years.

  Project that promises you cash flows

You are considering a project that promises you cash flows of 770 USD at the end of year 1, and 971 usd at the end of year 2. The cost to buy into the project

  Define what is the required rate of return on a stock

Assume that the risk-free rate is 6 percent and the expected return on the market is 13 percent. What is the required rate of return on a stock that has a beta of 0.7?

  At what interest rate would this become attractive

Your company is looking at the possibility of replacing this loan with a loan that has estimated closing costs of $3,300.00. At what interest rate would this become attractive?

  New mean annual salary

The mean annual salary of employees at a company is $36,000. At the end of the year, each employee receives a $1000 bonus and a 5% raise (based on salary). What is the new mean annual salary (including the bonus and raise) of the employees?

  What annual rate of return is implied on a loan

What annual rate of return is implied on a $2,500 loan taken next year when $4,125 must be repaid in year 5? (Do not round intermediate calculations).

  Using capm approach to find cost of common stock

You are trying to compute the price of a preferred stock you are examining. This preferred stock has an yearly dividend of $5 per share and a par value of $30.

  Costs of capital for different operating divisions

Corporations often use different costs of capital for different operating divisions. Using an example, calculate the weighted cost of capital (WACC). What are some potential issues in using varying techniques for cost of capital for different divi..

  What must the coupon rate be on the bonds

Osboume Corporation has bonds on the market with 19.0 years to maturity. YTM of 11.1 percent, and a current price of $937. The bonds make semiannual payments.

  What would be the stock prices for the firms

Now as part of your analysis, assume the P/E ratio would be 15 for the riskier company in terms of heavy debt utilization in the capital structure.

  What is the net present value of the project

If the project's cost of capital is 12 per cent, what is the present value of the project's expected cash flow stream?

  Find the value of a share

Gillette has declared that it will pay an annual dividend of $.65 one year from now. Analysts expect this dividend to grow at 12 percent per year thereafter through the fifth year.

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