What would be the price if comparable debt yields 12

Assignment Help Finance Basics

Reference no: EM13619988

A high-yield bond has the following terms: Principal amount $1,000 Annaul Interest Paid $100 Maturity 10 years

(a) What is the bond's price if comparable debt yields 12 percent?

(b) What would be the price if comparable debt yields 12 percent and the bond matures after five years.

(d) What would be the bond's price in a and b if interest rates declined to 9 percent?

(e) What are the curretn yield and yield to maturity in d?

(f) What two generalizations may be drawn from the above price changes?

Reference no: EM13619988

Questions Cloud

Convert net paid days worked to a factor for the laboratory : the metropolis health system managers are also working on their budgets for next year. each manager must annualize his

You are planning to save for retirement over the next 30 : you are planning to save for retirement over the next 30 years. to do this you will invest 800 a month in a stock

A bond matures in 2020 and has an annual coupon of 365 : a bond matures in 2020 and has an annual coupon of 3.65 percent payable on january 1 and july 1. the current price of

Pdq corp has sales of 4000000 the firms cost of goods sold : pdq corp. has sales of 4000000 the firms cost of goods sold is 2500000 and its total operating expenses are 600000.

What would be the price if comparable debt yields 12 : a high-yield bond has the following terms principal amount 1000 annaul interest paid 100 maturity 10 yearsa what is the

As a manager of a firm you are concerned about a potential : as a manager of a firm you are concerned about a potential increase in interest rates which would reduce the demand for

Us firm x can borrow dollars at libor1 floating rate or 13 : 1. us firm x wants yens. it can borrow yens at 5 and can borrow dollars at 10. japanese firm y wants dollars. it can

Projects a and b are mutually exclusive project a costs : projects a and b are mutually exclusive. project a costs 10000 and is expected to generate cash inflows of 4000 for 4

If the firms risk as perceived by market participants : common stock valuation-zero growth scotto manufacturing is a mature firm in the machine tool component industry. the

User Account

All Pages