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Question: Part A: An investor just purchased a 10-year, $1,000 par value bond. The coupon rate on this bond is 8 percent annually, with interest being paid every 6 months. If the investor expects to earn a 10 percent simple rate of return on this bond, how much should she pay for it? (Round the answer to two decimal places.)
Part B: Assume that an investor wishes to purchase a 20-year bond with a maturity value of $1,000 and semiannual interest payments of $40. If the investor requires a 10 percent simple yield to maturity on this investment, what is the maximum price she should be willing to pay for the bond? (Round the answer to the nearest whole number.)
A 619
B 902
C 828
D 674
Tony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds will pay $45 interest every 6 months. Current market conditions are such that the bonds will be sold at net $937.79. What is the yield to maturity (YTM) of the issue as a broker would quote it to an investor? (Round the answer to the nearest whole number.)
9%
10%
11%
7%
The last dividend on Spirex Corporation's common stock was $4.00, and the expected growth rate is 10 percent. If you require a rate of return of 20 percent, what is the highest price you should be willing to pay for this stock?
$44.00
$38.50
$50.00
$45.69
What is the fee (percentage of the investment in your fund, deducted at the end of the year) that you can charge to make the client indifferent between.
Obtain a copy of the annual report of McDonald's Corporation for the most recent year. You can find the annual report at the company's website.
What are the advantages and disadvantages of a voluntary workout to resolve financial distress? What are the advantages and disadvantages of declaring bankruptcy to resolve financial distress?
Suppose 144 yen could be purchased in the foreign exchange market for one U.S. dollar today. If the yen depreciates by 8.0% tomorrow, how many yen could one U.S. dollar buy tomorrow?
20 year 0 coupon bond with a face value of $2,000 was issued at a rate of 10%. Currently the rate is 11%. 10 year 0 coupon bond with a face value of 10% is now is at 11%. Which bond has the highest change in price?
1) What is the main disadvantage of using only a debit card?
An insurance company owns $50 million of floating-rate bonds yielding LIBOR plus 1 percent. These loans are financed with $50 million of fixed-rate guaranteed.
hot wings inc. has an odd dividend policy. the company has just paid a dividend of 4 per share and has announced that
What is the present value of the interest tax shields from this? debt?
What is the value of the stock if the required rate of return is 12%? Solution?
What is the project's discounted payback? Round your answer to two decimal places.
The risk free rate is 3%, the market risk premium is 3.6% & the beta is 1.10. The market is at equilibrium, using the above information: What are the dividends 1 year from now?
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