What would be your total real return on investment

Assignment Help Financial Management

Reference no: EM131890925

You bought one of Bergen Manufacturing Co.’s 6.2 percent coupon bonds one year ago for $1,038. These bonds make annual payments and mature fifteen years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 6 percent.

If the inflation rate was 2.4 percent over the past year, what would be your total real return on the investment?

Reference no: EM131890925

Questions Cloud

Convertible bonds for financing rather than straight bond : What are the pros and cons of using options to compensate employees-why would company choose to use convertible bonds for financing rather than straight bond?

Personal savings and investment decisions : Explain how the time value of money affects your personal savings and investment decisions. Discuss how inflation relates to the time value of money.

Fund earned investment income : A fund earned investment income of 9,200 during 1991. A deposit was made at time K during the year.

Prepare the necessary journal entries for sunland equipment : Assuming Valco Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for Sunland Equipment Company for entire term of note

What would be your total real return on investment : If the inflation rate was 2.4 percent over the past year, what would be your total real return on the investment?

What is the internal rate of return for the project : Consider a project that requires an initial investment of $5.2 million at time zero. The expected net cash inflows over the five-year life of the project.

Expected one year holding period return : If the market price of a share is currently $35, what is your expected 1-year holding-period return on Xyrong stock?

What amount should be recorded as the cost of new forklift : The old forklift had cost $43,000, a 5-year useful life and a $5,000 salvage value. What amount should be recorded as the cost of the new forklift

What is the amount of the net new borrowing : The interest paid was $3,200. What is the amount of the net new borrowing?

User Account

All Pages