What is the rate of return received by the investor

Assignment Help Financial Management
Reference no: EM13763219

If an investor purchases a bond 10 years ago when the bond was first issued and sold the bond today, what is the rate of return received by the investor? When originally issued, the bonds were sold for $960 per bond; today their current market price is $1,065 per bond. The company pays a semi-annual interest of $45 per bond.

Reference no: EM13763219

Questions Cloud

Compute current price of bonds if present yield to maturity : The Lone Star Company has $1,000 par value bonds outstanding at 10 percent interest. The bonds will mature in 20 years. Compute the current price of the bonds if the present yield to maturity is: 6 percent? 9 percent? 13 percent? Three total answers ..
Discuss the rights of all the parties : Stanley and Garcia were both minors. Stanley bought Garcia's baseball card collection for $1,000. Stanley then sold the collection to American Collectors Company for $1,500, saying he was 22 and it was his collection. Two weeks later, Garcia decid..
What is the fair price of megadebt stock : MegaDebt Corp. just issued a dividend of $0.85. The firm pays quarterly dividends. The dividends are expected to grow at 0.2 percent each quarter. The shareholders ask for a return of 5.25 percent each year. What is the fair price of MegaDebt stock? ..
Bond and company pays a semi-annual interest : When originally issued, the bonds were sold for $960 per bond; today their current market price is $1,065 per bond and company pays a semi-annual interest of $45 per bond. If an investor purchases a bond 10 years ago when the bond was first issued an..
What is the rate of return received by the investor : If an investor purchases a bond 10 years ago when the bond was first issued and sold the bond today, what is the rate of return received by the investor? When originally issued, the bonds were sold for $960 per bond; today their current market price ..
Required rate of return on the bond : What is the value of a 10 percent annual coupon, $1,000 par value bond with 20 years to maturity if the required rate of return on the bond is 12 percent?
Forecasting cash flows : Your company is forecasting cash flows of $15 million next year, $25 million in year 2 and $40 million in year 3. After that growth in cash flows is expected to level out at 5% per year. Your company has $150 million in marketable securities and $350..
Oil powered generator with a solar power generator : Georgia Power is contemplating replacing an oil powered generator with a solar power generator. The old generator was purchased 22 years ago and is being depreciated over its 25 years life to a zero salvage value using straight-line depreciation. The..
Tax return claiming : Taylor and Jordan are married and file a joint tax return claiming their two children, ages 12 and 9 as dependents. Their AGI for 2014 is $100,000. Taylor and Jordan's child tax credit for 2014 is:

Reviews

Write a Review

Financial Management Questions & Answers

  What is the fixed charge coverage

A firm has a net income before interest and taxes of $193,000 and interest expense of $28,000. What is the times-interest-earned ratio? And if the firm's lease payments are $48,500, what is the fixed charge coverage?

  What will be the effect on total production

Assume complete specialization, where china produces only toys and France produces only wine. What will be the effect on total production?

  Market value of equity equals gross proceeds from offering

Red Shoe Co. has concluded that additional equity financing will be needed to expand operations and that the needed funds will be best obtained through a rights offering. It has correctly determined that as a result of the rights offering, the share ..

  What are factors affecting the capital structure of company

Calculate the NPV and IRR for the project from the standpoint of the parent company. What are your recommendations for the proposal?

  Retire plan problem

Warren Reed just turned 40. He has decided that he would like to retire when he is 65. He thinks that he will need $2,000,000 in special retirement accounts at age 65 to maintain his current lifestyle. For the next 15 years he can afford to put $10,0..

  Managing your individual retirement accounts.

You are managing your individual retirement accounts. Are you worried about losing money in your retirement accounts? What could you do to reduce risk or increase risk if you’re not worried about losing money? Explain.

  Writing a business plan to create financials as part of the

writing a business plan to create financials as part of the business plan.section 1 start-up expenses and

  Prepare a three page paper that responds to the coca-cola

prepare a three page paper that responds to the coca-cola research case questions using the web access the coca-cola

  Calculate the possible arbitrage profits

Calculate the possible arbitrage profits given the following environment. Make sure you show all calculations and explain the steps needed to realize the profit.

  Calculate the equivalent uniform annual worth of the machine

A machine costs $73,000 initially and will have a salvage value of $10,000 after 9 years. It will also have an operating cost of $21,000 in year 1, with 5% continuing increases each year thereafter to year 9. The MARR is 19% per year. Compute the Equ..

  Internal and the sustainable rates of growth

Why is it important for managers to understand the importance of both the internal and the sustainable rates of growth?

  What is the expected return on the mutual fund

Consider the following capital market: a risk-free asset yielding 0.75% per year and a mutual fund consisting of 70% stocks and 30% bonds. The expected return on stocks is 10.75% per year and the expected return on bonds is 3.25% per year. The standa..

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