What would the bonds be selling for if yields had risen

Assignment Help Financial Management

Reference no: EM131310060

Fix-It Inc. recently issued 10-year, $1000 par value bonds at an 11% coupon rate. Assume bond coupons are paid semiannually.

A. Two years later, similar bonds are yielding investors 6%. At what price are Fix-Its bonds selling? Round the answer to the nearest cent. $

B. What would the bonds be selling for if yields had risen to 12%? Round the answer to the nearest cent. $

C. Assume the conditions in part a. Further assume interest rates remain at 6% for the next 8 years. Find the price of the Fix-It bonds at the end of year 10. Round the answer to the nearest cent.

Reference no: EM131310060

Questions Cloud

What is the required rate of return on the project : Stock XYZ has an expected return of 12% and B = 1. Stock ABC is expected to return 13% with a beta of 1.5%. The market's expected return is 11% and r1 = 5%. According to the CAPM,which stock is a better buy? What is the alpha of each stock? What is t..

Create a system reference guide for your employer : You have been called upon to put together some reference materials for other groups to follow, Create a System Reference Guide for your employer in three parts over Weeks Two, Three, and Four.

How enciphering of connections would affect thumbprinting : If the connection contents were enciphered using a link encipherment protocol, would thumbprinting work? Why or why not?

Create an uml sequence diagram explaining the addition : The firms involved in the financing, parts suppliers, manufacturing hardware suppliers, design consultants, and the labor unions want to see a uml sequence diagram explaining the addition.

What would the bonds be selling for if yields had risen : Fix-It Inc. recently issued 10-year, $1000 par value bonds at an 11% coupon rate. Assume bond coupons are paid semiannually. Two years later, similar bonds are yielding investors 6%. At what price are Fix-Its bonds selling? What would the bonds be se..

What would your monthly payments be : Suppose that you can get a 30-year mortgage for $100,000 at 7.5%, what would your monthly payments be?

What are the main keys to making an alliance work why : What are the main keys to making an alliance work? Why? Explain your answer in a well-constructed and persuasive manner

What is the excess burden of taxation : What is the excess burden of taxation? why is there an excess burden, and what factors affect the size of the excess burden for a specific tax?

What each of the women might think about women current role : Women's Roles Then & Now. Script. Script a conversation between two (2) notable women from the 18th and / or 19th century on the roles women should play in society. Within the dialogue, include: What each of the women might think about women's curr..

User Account

All Pages