What is the value of a bond that has a par value

Assignment Help Financial Management
Reference no: EM13877748

What is the value of a bond that has a par value of $1,000, a coupon rate of 8.26 (paid annually), and that matures in 30 years? Assume required rate of return on this bond is 8.65 percent

Reference no: EM13877748

Questions Cloud

Calculate the NPV of this investment opportunity : You are considering opening a new plant. The plant will cost $100 million upfront and will take one year to build. After that, it is expected to produce profits of $30 million at the end of every year of production. The cash flows are expected to las..
Dividend-discount model-value of share of L Oreal stock : L'Oreal will pay an annual dividend of $0.65 one year from now. Analysts expect this dividend to grow at 12% per year thereafter until the fifth year. After then, growth will level off at 2% per year. According to the dividend-discount model, what is..
Two of the major investment markets : Two of the major investment markets in the United States are the New York Stock Exchange and NASDAQ. Explain the major differences between the two, including a discussion of how you would use each to purchase investments.
When used as evidence-what does an effective example do : When used as evidence, what does an effective example do?
What is the value of a bond that has a par value : What is the value of a bond that has a par value of $1,000, a coupon rate of 8.26 (paid annually), and that matures in 30 years? Assume required rate of return on this bond is 8.65 percent
The two most basic components of any investment opportunity : The two most basic components of any investment opportunity are risk and return. Define each and explain how they are related in the investment world. Why does their relationship matter to you as an investor?
The corporate valuation model discounts free cash flows : The corporate valuation model discounts free cash flows by the required return on equity. The corporate valuation model can be used to find the value of a division. An important step in applying the corporate valuation model is forecasting the firm's..
Weighted average cost of capital for use capital budgeting : Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting?
Calculate the times interest earned ratio : Calculate the times interest earned ratio for Tierre's Ts, Inc. using the following information. Sales = $200,000, cost of goods sold = $50,000, depreciation expense = $13,000, addition to retained earnings = $70,000, dividends per share = $0.50, tax..

Reviews

Write a Review

Financial Management Questions & Answers

  What must the coupon rate be on the bonds

Volbeat Corporation has bonds on the market with 15.5 years to maturity, a YTM of 10.4 percent, and a current price of $944. The bonds make semi-annual payments.

  What amount will connor receive in cash each year

Connor has $300,000 to invest in a 5 year annuity. Assuming the time value of money is 10%, what amount will Connor receive in cash each year?

  Develop a spreadsheet model for a listed australian company

The Assignment for Accounting Modelling ACCT3003. Develop a spreadsheet model for a listed Australian company using advanced MS Excel functions as part of its construction with a written explanation of your financial model and how the output from ..

  Example of a performance measure

What does the phrase you get what you measure refer to? Give an example of a performance measure you’ve come across in your experience (work, school, or home) and comment on the strengths and weaknesses of that measure.

  What is the internal rate of return for the machine

Hincapie Manufacturing is evaluating investing in a new metal stamping machine costing $30,924. Hincapie estimates that it will realize $12,000 in annual cash inflows for each year of the machine's 3-year useful life.

  How changes in input variables affect the output variable

Find the following values, using the equations, and then work the problems using a financial calculator to check your answers. Disregard rounding differences. (Hint: If you are using a financial calculator, you can enter the known values and then pre..

  How and why does working capital affect the incremental cash

How and why does working capital affect the incremental cash flow estimation for a proposed large capital budgeting project?  Explain

  What is the future value-compounded quarterly

What is the future value of $500 invested at 8.94% compounded quarterly for 12.5 years (round to the nearest $1)?

  DCF and SMLmethod-calculate the cost of equity

Using the DCF method, calculate the cost of equity. Using the SML method, calculate the cost of equity. The answers in [A] and [B] are very different. Why?

  Large retailer obtains merchandise under the credit terms

A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's e..

  Calculate the retailer selling price

Within a given distribution channel, the following information is available concerning trade margins and costs. A wholesaler has a unit selling price of $27 and a unit cost of $18. The retailer requires a 32% mark up on selling price. The manufacture..

  What net profit margin would LeCompte need in order

XYZ Corporation has $312,900 in total assets, and its uses only common equity capital (i.e., zero debt). Its sales last year were $620,000, and its net income after tax was $24,655. Stockholders recently voted in a new management team that has promis..

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