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Question: 1. (Expected rate of return and current yield) Citigroup issued bonds that pay a 5.5 percent coupon interest rate. The bonds mature in 5 years. They are selling for $1,076. What would be your expected rate of return (yield to maturity) if you bought the bonds? What would the current yield be? 2. (Bondholders' yield to maturity) Alph Plc.'s bonds mature at par in 10 years. The bonds pay annual coupon rate 9 percent. If the current market price of this bond is $1,320, what is the yield to maturity of Alpha's bonds?
For each of the projects shown in the following table, calculate the internal rate of return (IRR). Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRRacceptable.
Given that the lower yield was not because of default risk or exchange rate risk, explain how the British bonds could have generated a lower yield than the U.S. bonds.
Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.6 per cent annually. If you require a 12 per cent rate of return, how much are you willing to p..
mr. davidson plans to buy a new house in october 2013. the sale price of the house is 436000. he plans to pay 20 down
tulip mania inc. imposes a payback cutoff of three years for its international investment projects. if the company has
If you find that equity beta is different between Frim A and its comparable firm in (a), how would you explain the difference? If you expect no difference explain why they are not different.
a strategy consists of buying a market index product at 830 and longing a put on the index with a strike of 830. if
A firm has total debt of $1,120 and a debt-equity ratio of .29. What is the value of the total assets?
What are the differences between merchandisers and manufacturers?- Describe the types of inventories used by manufacturers and merchandisers.
you sell a 6 percent 10000 bond for 9180 plus 156 in accrued interest for a total of 9336. soon thereafter the company
The cost of capital for both of these investments is 9.5%. The life for both machines is estimated to be 5 years. During this period, cash flows for machine 1 will be $17,000 per year and cash flows for machine 2 will be $8,000 per year. These cas..
why the right to acquire share is not chargeable to tax under employee share scheme section 14. under what condition
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