User Account

All Pages

What will be the price of the bond if it is downgraded

Assignment Help Managerial Accounting
Reference no: EM133074828

Question - Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 5.45% (annual coupon payments) and a face value of $1,000. Andrew believes it can get a rating of A from Standard and & Poor's. However, due to recent financial difficulties at the company, Standard & Poor's is warning that it may downgrade Andrew Industries' bonds to BBB. Yields on A-rated, long-term bonds are currently 4.95%, and yields on BBB-rated bonds are 5.35%.

a. What is the price of the bond if Andrew Industries maintains the A rating for the bond issue?

b. What will be the price of the bond if it is downgraded?

Reference no: EM133074828

Questions Cloud

How imp opens a strip hedge based on hedge ratio : A US importer, IMP, will purchase 500 Italian sports cars on the 15th trading day of FEB, APR, JUL and OCT of 2022. The price is fixed at EUR40,000/car.
Calculate the size of monthly payments : If interest on the mortgage is 8.5% compounded semi-annually, calculate the size of monthly payments made at the end of each month.
Estimate effect of synergies on enterprise value : Identify the synergies and conduct a sensitivity analysis to estimate the effect of synergies on enterprise value.
What is the price of the company stock : What is the price of the company' s stock today if the rate of return is 21%?
What will be the price of the bond if it is downgraded : Yields on A-rated, long-term bonds are currently 4.95%, and yields on BBB-rated bonds are 5.35%. What will be the price of the bond if it is downgraded
ACCT2001 Taxation Assignment : ACCT2001 Taxation Assignment Help and Solution, Southern Cross University - Assessment Writing Service
Develop florida sport industry : One of its roles is to provide grants to support sporting events that bring out-of-state visitors to Florida. It is funded by Florida taxpayers.
What amount of income Pallet Company will report : Pallet Company reported income of $ 55,000 and paid dividend $8,500 in 20X9. What amount of income Pallet Company will report
Future stages of a business cycle : Market participants, including financial institutions, fund managers and corporations, must understand monetary policy setting impacts on economic activity and

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd