What is the value of the bond

Assignment Help Financial Management
Reference no: EM131551135

Potter Industries has a bond issue outstanding with a 6% coupon rate with semiannual payments of $30, and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 9%, what is the value of the bond? Round your answer to the nearest cent. Do not round intermediate calculations.

Reference no: EM131551135

Questions Cloud

Making plans for retirement : You and your wife are making plans for retirement. What amount do you need in your retirement account the day you retire?
What is the irr of the payment option : The second option is to pay cash for the car and get a $2500 rebate. What is the IRR of the payment option?
What amount will be in your account at the end of four years : You plan to make your first deposit one year from today. What amount will be in your account at the end of 4 years?
Prepare vertical analysis for each company-interpret results : Analyze each company’s balance sheet. Prepare a vertical analysis for each company, interpret the results, and write a financial report.
What is the value of the bond : If the going annual interest rate is 9%, what is the value of the bond?
Make regarding the investment opportunity : What recommendation do you think this analyst will make regarding the investment opportunity?
Bond issue outstanding with an annual coupon : Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity.
What are these payments worth to you today at discount rate : What are these payments worth to you today at a discount rate of 12 percent, compounded annually?
About the dividend growth model : Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2013)?

Reviews

Write a Review

Financial Management Questions & Answers

  What is present value of the annuity

If the interest rate is 9% compounded monthly for the first four years, and 7% compounded monthly thereafter, what is the present value of the annuity."

  Calculating rates of return

Calculating the Number of Periods. Calculating Rates of Return. In 2011, an 1880-O Morgan silver dollar sold for $13,113. What was the rate of return on this investment?

  What is the equivalent aftertax yield

A taxable corporate issue yields 6.2 percent. For an investor in a 35 percent tax bracket, what is the equivalent aftertax yield?

  Two bonds outstanding

An investor buys 500 shares of stock at $50 and the stock pays a 4% annual dividend. A company has two bonds outstanding. The first matures after five years and it has a coupon rate of 3%. The second matures after ten years and it has a coupon rate o..

  What will next years assets be at the end of the year

The firm earned $7,000 in sales last year while selling 20,000 units. Net Income that same year was $850. At the end of that same year, the Balance Sheet reflected $11,000 in total assets, having $3,500 in debt and $7,500 in equity accounts. The firm..

  Annual interest tax shield-through with debt insurence

In recent years, Haverhill Corperation has averaged a net income of $10 million per year on net sales of $100 million per year. It currently has no-long term debt, but is considering a debt issue of $5 million. The interest rate on the debt woyuld be..

  What is TAFKAPs WACC

Assume TAFKAP’s weighted average tax rate is 34 percent and its cost of equity is 13.0 percent. What is TAFKAP’s WACC?

  An investment project has annual cash inflows

An investment project has annual cash inflows of $4,600, $3,700, $4,900, and $4,100, for the next four years, respectively. The discount rate is 13 percent. What is the discounted payback period for these cash flows if the initial cost is $5,500?

  What is the current share price

Estes Park Corp. pays a constant $8.75 dividend on its stock. The company will maintain this dividend for the next 10 years and will then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share pr..

  Weighted average cost of capital

Coleman Technologies Inc. Cost of Capital Coleman Technologies is considering a major expansion program that has been proposed by the company’s information technology group. Before proceeding with the expansion, the company must estimate its cost of ..

  Context of operations and supply chain management

Relate the existing challenges faced by IKEA. In your discussion, you should explain these challenges in the context of operations and supply chain management.

  Explain efficient market hypothesis and its three forms

Describe the organization of the statement of cash flows. And how do you compute net income? What is the realization principle, and why may it lead to a difference in the timing of when revenues are recognized on the books and cash is collected? Expl..

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