Reference no: EM13928303
Bond Valuation
This assignment contains two parts: Part I and Part II.
Part I
Answer these questions and show your work:
• Assume that the company that you selected for the Module 1 SLP has a bond outstanding that matures in 20 years and has a coupon rate of 6.5%. The par value of the bond is $1,000.
• If the yield to maturity is 8% and the bond pays interest on an annual basis, what's the current price of the bond? Is the bond selling for a premium or discount? How can you tell?
• If the yield to maturity is 8% but the bond pays interest on a semi-annual basis instead of an annual basis, what's the current price of the bond? Is it different from the value when using annual compounding? Explain.
• Now, assume that the economy enters into a recession and interest rates fall. The bond's yield to maturity is now 5%. What's the bond's new price? How does the price compare with your answer in part a? Why did the bond's value change?
• A bond matures in ten years and is currently selling for $1,125. The bond pay interest annually, has a par value of $1,000, and a yield to maturity of 10.75%. What's the bond's current yield?
Part II:
Write a 2-page essay comparing reinvestment risk and interest rate risk and how an investor can protect his or her portfolio from those risks. Please be sure to discuss duration in your paper.
You are expected to:
• Describe the purpose of the report and provide a conclusion. An introduction and a conclusion are important because many busy individuals in the business environment may only read the first and the last paragraph. If those paragraphs are not interesting, they never read the body of the paper.
• Answer the SLP Assignment question(s) clearly and provide necessary details.
• Write clearly and correctly-that is, no poor sentence structure, no spelling and grammar mistakes, and no run-on sentences.
• Provide citations to support your argument and references on a separate page. (All the sources that you listed in the references section must be cited in the paper.) Use APA format to provide citations and references.
• Type and double-space the paper
Whenever appropriate, please use Excel to show supporting computations in an appendix, present financial information in tables, and use the data computed to answer follow-up questions. In finance, in addition to being able to write well, it's important to present information in a professional manner and to analyze financial information. This is part of the assignment expectations and will be considered for grading purposes.
|
Psychosocial components of jordan pain problems
: Write a 1,200 +word paper discussing the following: Atleast three methods used to assess pain, including cognitive, behavioral, and self-report methods and The psychosocial components of Jordan's pain problems
|
|
Compute the net present value for each project
: Calculate the internal rate of return for each project. Calculate the net present value for each project, assuming the firm's weighted cost of capital is 12 percent. Which project should be adopted? Why?
|
|
Side effects for each brand of pain medication
: Four different brands of a pain medication used for chronic back ailments were tested to see if the number of side effects for each brand were the same. The table below lists the results of the reported number of side effects for each brand of pa..
|
|
Identify three of the evaluation elements
: Identify three of the evaluation "elements" that you believe would be among the most key indicators of a company's ability to successfully taken on a complex multi-organization EA program. Explain why you believe each of the three elements you cho..
|
|
Whats the bonds current yield
: Describe the purpose of the report and provide a conclusion. An introduction and a conclusion are important because many busy individuals in the business environment may only read the first and the last paragraph
|
|
Amendments and their impact on criminal procedure
: Write a 1,400- to 1,750-word paper in which you describe the key elements of the rights guaranteed by the Fourth, Fifth and Sixth Amendments and their impact on criminal procedure by the courts and police officers.
|
|
Various aspects of finance that management
: Summarize the role of management as it relates to finance in a corporation. In your post, address the following: Indicate the various aspects of finance that management must understand.
|
|
Understanding of christian doctrine
: After completing Phase of the Lab Project, you now have 2 important variables in relation to your research question: a score representing understanding of Christian doctrine, and a variable representing amount of church attendance.
|
|
How can technology increase organizational effectiveness
: How can technology increase organizational effectiveness? Identify an organization and provide examples of how the organization's technologies have increased or decreased its organizational effectiveness.
|