What is the yield to maturity of bonds

Assignment Help Financial Management
Reference no: EM131499615

1. Airnet Auto Corporation issued bonds with a coupon rate of 12 percent, pay coupons semiannually, have 7 years remaining to maturity, and are currently priced at $950 per bond. What is the yield to maturity?

a. 12.00%

b. 15.25%

c. 18.15%

d. 13.11%

2. Calculate the current price of a $1,000 par value bond maturing in 10 years with a coupon rate of 12 percent, paid semiannually, that has a YTM of 15 percent?

a. $604

b. $847.08

c. $1,090

d. $1,073

Reference no: EM131499615

Questions Cloud

Calculate the first two annual worth factor values : Calculate the first two annual worth factor values, that is, A values for n = 1 and n = 2 that would be in a 10% interest table for growth rate of 4% per year.
How effective was the new scorecard program : How effective was the new scorecard program in stimulating strategic discussions at the July 2003 board meeting?
What is present value of the new drug : You work for a pharmaceutical company that has developed a new drug. What is the present value of the new drug if the interest rate is 11% per year?
Semi-annual coupon payments : Calculate the percentage change in the price over the course of a year for a bond with semi-annual coupon payments
What is the yield to maturity of bonds : Airnet Auto Corporation issued bonds with a coupon rate of 12 percent, pay coupons semiannually, What is the yield to maturity?
Average real risk-free rate and average real risk premium : What was the average real risk premium? What was the average real risk-free rate over this time period?
European annualized interest rates : Assume the following information regarding U.S. and European annualized interest rates:
Calculate weighted average cost of capital and cost of debt : Calculate the weighted average cost of capital (WACC) and cost of debt given:
Standard deviation of returns for large company stocks : Calculate the standard deviation of the returns for large company stocks and t-bills over this time period.

Reviews

Write a Review

Financial Management Questions & Answers

  Activities in regard to derwent shares

Explain to John, Sid and Kylie the possible results in legal terms of their activities in regard to Derwent's shares.

  Expected return on portfolio-equally invested in two assets

A stock has a beta of 1.15 and an expected return of 13 percent. A risk-free asset currently earns 2.8 percent. a. What is the expected return on a portfolio that is equally invested in the two assets?

  What is the market risk premium

Asset W has an expected return of 16.0 percent and a beta of 1.45. If the risk-free rate is 3.2 percent, what is the market risk premium?

  Calculate the approximate market capitalization

Assume General Electric (GE) has about 10.3 billion shares outstanding and the stock price is $37.10. Also, assume the P/E ratio is about 18.3. Calculate the approximate market capitalization for GE

  What is the current pe ratio for each company

Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of $962,000. Without new projects, both firms will continue to generate earnings of $962,000 in perpetuity. What is the current PE ratio for each company? Pacif..

  Project has a required payback period of three years

A project has a required payback period of three years. Which one of the following statements is correct concerning the payback analysis of this project?

  Which sentence is a sub-conclusion

Consider the following argument and say which sentence is a sub-conclusion (both a premise and a conclusion). There is substantial evidence that Abner Doubleday did not invent baseball. He made no mention of it in his many letters and papers. He cert..

  Issue perpetual preferred stock

Cost of Preferred Stock Tunney Industries can issue perpetual preferred stock at a price of $61.50 a share. The stock would pay a constant annual dividend of $5.50 a share. What is the company's cost of preferred stock, rp? Round your answer to two d..

  The accounts receivable turnover is approximately

The Manana Corporation had sales of $60 million this year. How? long, on? average, does it take the firm to collect on its? sales?

  What is the break-even cost per kilowatt-hour

Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $.40 and lasts for 1,000 hours. You require a return of 10 percent and use a light fixture..

  Project is expected to generate an annual cash flow

A project is expected to generate an annual cash flow of $300,000 before debt service, during each of the first five years of operation. This expectation represents the mean of a probability distribution of possible cash flows, and has a standard dev..

  Basis in the equipment received in the exchange

Fred and Sarajane exchanged equipment in a qualifying-like-kind exchange, Fred gives up equipment with an adjusted basis of $14,000 (fair market value of $15,000)in exchange for Sarajane's equipment with a fair market value of $12,000 plus $3,000 cas..

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