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Harrimon Industries bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9%.
What is the yield to maturity at a current market price of $881? Round your answer to two decimal places. %
Would you pay $881 for each bond if you thought that a "fair" market interest rate for such bonds was 12%-that is, if rd = 12%?
a) You would not buy the bond as long as the yield to maturity at this price is greater than your required rate of return.
b) You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond.
c) You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return.
D) You would buy the bond as long as the yield to maturity at this price is less than your required rate of return.
e) You would buy the bond as long as the yield to maturity at this price equals your required rate of return.
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How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm's cost of debt capital is 10 percent and the cost of equity capital is 20%. What proportion of the firm is financed with debt?
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Considering a stream of ten payments of $1,000 where the first payment starts today and an interest rate of 6.5%, please indicate the present value. $7,069.13 $7,093.62 $7,656.10 $7,914.10 $8,165.12
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Harry Houdini Ltd issues a 10-year bond that pays a 4 percent coupon. The current market rate for similar bonds is 3 percent. Assume semiannual coupon payments. What is the maximum price that should be paid for this bond? (Round to the nearest dol..
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