What is the value of the bond immediately

Assignment Help Accounting Basics
Reference no: EM132654627

Question - The British government has a consol bond outstanding paying £400 per year forever. Assume the current interest rate is 12% per year.

a. What is the value of the bond immediately after a payment is made?

b. What is the value of the bond immediately before a payment is made?

Reference no: EM132654627

Questions Cloud

Describe relationship between agents and equity holders : Describe the agency relationship between agents and equity holders. Discuss 3 agency problems associated with equity. Explain in detail with an example.
What is multifactor authentication and what are some example : What is multifactor authentication and what are some examples? Ending all online crime is not a realistic goal, but simple steps can massively reduce.
The political and economic risks corporation : What are the political and economic risks a corporation may face when investing in a BRIC country? Discuss cultural factors
Calculate the total cost of ipo : Calculate the total cost of IPO. That is, what is the sum of direct and indirect cost?
What is the value of the bond immediately : The British government has a consol bond outstanding paying £400 per year forever. What is the value of the bond immediately
Find out the real rate of return : Suppose 1-year T-bills currently yield 1.05% and the future inflation rate is expected to be 2.25% per year.
Calculate the present value for investment x and y : Investment X offers to pay you $6,000 per year for seven years, whereas Investment Y offers to pay you $9,000 per year for four years
Prepare journal and trial balance for rand equipment repair : Prepare Journal and Trial Balance for Rand Equipment Repair, Inc. Sept. 8 Paid £1,300 for salaries due employees, of which £800 is for September.
What is the return expected on investment measured : Consider the following investment cash flowsYear Cash flow0 -1,0001 2502 4003 5004 600 5 600

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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