What is the yield to call on this bond

Assignment Help Finance Basics
Reference no: EM131132517

H Corporation has a bond outstanding. It has a coupon rate of 8 percent and a $1000 par value. The bond has 6 years left to maturity but could be called after three years for $1000 plus a call premium of $50. The bond is selling for $1050 what is the yield to call on this bond?

Reference no: EM131132517

Questions Cloud

What is the cost of common from retained earnings : Rivoli Inc. hired you as a consultant to help estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of common from retained e..
What is the value of each company before the merge : What is the value of each company before the merger? What are the values of each company's debt and equity before the merger? If the companies continue to operate separately, what is the total value of the companies
What is the difference between the yield to maturity : What is the difference between the yield to maturity and the yield to call? When would you expect a bond to be called when interest rates have increased after issuance or decreased after issuance?
What is a ballpark estimate of the value of this common stoc : Assuming that F Corp will live up to these projection forever and expects to pay a $1.54 dividend per share at the end of the coming year, what is a ballpark estimate of the value of this common stock?
What is the yield to call on this bond : H Corporation has a bond outstanding. It has a coupon rate of 8 percent and a $1000 par value. The bond has 6 years left to maturity but could be called after three years for $1000 plus a call premium of $50. The bond is selling for $1050 what is the..
What will the portfolio new beta be : If Jill replaces Stock A with another stock, E, which has a beta of 1.85, what will the portfolio's new beta be?
How many extra shares being recognized in the diluted eps : Using the treasury stock method, the options would result in how many extra shares being recognized in the diluted EPS calculation.
Derive a demand curve for pizza : Using the following utility schedule, derive a demand curve for pizza. Assume income is $10, the price of each slice of pizza is $1, and the price of each glass of beer is $2. Then change the price of pizza to $2 perslice.
What is the net cost of the call premium : Buchanan Corp is refunding $12 million worth of 10% debt. The new bonds will be issued at 8%. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium?

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculation of npv and irr and mirr

Calculation of NPV and IRR and MIRR and Profitability Index and Besides future cash flows what other financial criteria would you consider in making your decision between two or more alternatives

  Effective rate of interest

Regis Clothiers can borrow from its bank at 11 percent to take a cash discount. The terms of cash discount are 2/15, net 60. Should the firm borrow the funds?

  Describing currency derivatives

Mention the factors which affect currency call option premiums and briefly describe the relationship that exists for each. Do you think an at-the-money call option in euros has a higher or lower premium than an at-the-money call option in British ..

  Describe the procedures that are typically used

Describe the procedures that are typically used by an acquirer to value a target company, whether it is being acquired for its assets or as a going concern.

  What are the percentage changes in value when the yield goes

Given a five-year, 8% coupon bond with a face value of $1,000 and coupon payments made annually, determine its values given it is trading at the following yields: 8%, 6%, and 10%.

  Explain the company competitive positioning

Analyze the goals do not just list it them but put explaining - Explain the company competitive positioning and cooperative strategies

  An investor purchases a call option with an exercise price

an investor purchases a call option with an exercise price of 55 for 2.60. the same investor sells a call on the same

  Why do the numerical examples in this chapter involve

Why do the numerical examples in this chapter involve a large dividend in the last year of the explicit forecast period?

  Calculate the net present value of projects

Calculate the Net Present Value (NPV) of both projects. Which project should the firm choose based on the NPV criteria? Calculate the Internal Rate of Return (IRR) of both projects. Which project should the firm choose based on the IRR criteria?

  Difference between a stock dividend and a stock split

What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declares a 100 percent stock dividend or a 2-for-1 split? Assume that either action is feasible.

  Define bootstrap financing

What is bootstrap financing it? Why don't all firms use bootstrap financing? Are there any dangers with this approach?

  What fraction of the variance is idiosyncratic

Stock MPQ has a volatility of 25% and ?i = 0:7. The market has volatility of 15%.

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