What will be the change in the bond price in dollars

Assignment Help Finance Basics
Reference no: EM131898310

A corporate bond with a 7.8 percent coupon has 17 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 8.5 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 9.8 percent.

What will be the change in the bond's price in dollars? (Assume interest payments are semiannual.) (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Change in bond price$

What will be the change in the percentage? (Negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Change in bond percent%

Reference no: EM131898310

Questions Cloud

What is the future value of a annuity payment : What is the future value of a $650 annuity payment over four years if interest rates are 8 percent?
How would the minimum yearly cash inflow change : How would the minimum yearly cash inflow change if the company required a 16% return on its? investment
Calculate the 2015 value of net income available to common : Calculate the 2015 value of net income available to common stockholders for Jake's Jamming Music, Inc.
Identify medical management need including primary care need : Identify medical management needs, including primary care needs, specific to this client. Recommend follow-up plans for clients with depression disorders.
What will be the change in the bond price in dollars : The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 9.8 percent.
Briefly explaining key aspects of your FICO Xpress model : MS987 Optimization for Analytics Group Project. Write a memo to Ananth and Christine, briefly explaining key aspects of your FICO Xpress model
What would the loan balance be in ten years : Say that you purchase a house for $320,000 by getting a mortgage for $280,000 and paying a $40,000 down payment.
What gives rise to the currency exposure at AIFS : What gives rise to the currency exposure at AIFS? What would happen if Archer-Lock and Tabaczynski did not hedge at all?
How much can he expect to receive each year : He wants to receive a fixed annual sum for the next 30years starting a year from now. At a rate of Return of 4% P.A. How much can he expect to receive each year

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the annual rate of return

Assume that part of the US is worth an average of $5,500 per acre in 2018. What is the annual rate of return of this purchase for the U.S.?

  How much will the price per share of the firm increase

(II) Grow earnings at an annual rate of 8%, but with a reduction in payout to only 40%. Again no other financing will be necessary apart from this plowback. By how much will the price per share of the firm increase (in dollars) if it adopts the right..

  What would he be willing to pay for the bultrite bond

$1000 par, 6 1/8% coupon rate, 15 year maturity bond which is currently selling for $1020. If jay required a return is 9%, what would he be willing to pay for the bultrite bond?

  Separate component assignments

Throughout this course you will prepare a comprehensive 2,500-word financial analysis (excluding tables, figures, and addenda) of a chosen company following the nine-step assessment process detailed in the resource Assessing a Company's Future Fin..

  Caluclate gdp and employment stable

If Congress prefers to decrease spending, rather than raise taxes, in an effort to reduce the budget deficit, determine the Fed do to keep GDP and employment stable?

  Six months from today you plan to borrow 433 million for 6

six months from today you plan to borrow 433 million for 6 months at libor. you hedge your interest rate risk with a

  Finding future or present value of bill shaffer

Bill Shaffer wishes to have $200,000 in a retirement fund 20 years from now. He can create the retirement fund by making a single lump sum deposit today. What is the maximum annual withdrawal he can make over the following 15 years?

  What is the probability that you randomly select

What is the probability that you randomly select a kid who plays a string or percussion instrument?

  Use the black model to determine a fair price for the cap

The firm's best estimate of the volatility of forward rates is 16.6 percent. The notional principal is $10 million, and the payoff is based on 90-day LIBOR. Use the Black model to determine a fair price for the cap.

  What amount of the payroll department costs

What amount of the payroll department costs will be allocated to the molding department?

  A company wants to build new factory for increased capacity

proposal a new factorya company wants to build a new factory for increased capacity. using the net present value npv

  How the amount of debt in the capital structure translates

How the amount of debt in the capital structure translates into leverage and risk (volatility) - Capital structure is the mix of equity and long-term and "permanent" short-term debt utilized by management to finance the firms assets

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