Which bond can i expect to be called and why

Assignment Help Financial Management
Reference no: EM131338629

Bond A is $1,000 par value with 14% annual interest for 20 years. Its current market price is $1,340.54. Its current yield is 10.44% and its yield to maturity is 9.62%.

Bond Z is $1,000 par value with 5.25% annual interest for 20 years. Its current market price is $595.61. Its current yield is 8.81% and its yield to maturity is 9.16%.

Which bond can I expect to be called and why?

Reference no: EM131338629

Questions Cloud

Calculations are based on an annual interest rate : Rebecca receives a life insurance benefit. If she uses the money to purchase 20-year annuity the annual payments will be X. If a 10-year annuity is purchased, the annual payments will be 1.5X. Both calculations are based on an annual interest rate i...
Manufacturing installed an automated conveyor system : Eight years ago, Jaguar Manufacturing installed an automated conveyor system for $38 000. In any year, removal of the current automated conveyor system requires an investment of $2, 500. The operations and maintenance costs for the next year is $5k i..
What are externalities : What are externalities? Think of positive externalities and negative externalities. How do externalities affect the persons’ (economic agents’) decision making and behavior? – Present your idea.
What would its price be relative to bond and why : Bond Z is $1,000 par value with 5.25% annual interest for 20 years. Its current market price is $595.61. Its current yield is 8.81% and its yield to maturity is 9.16%. It's comparable rate is 10%. If Bond Y has a 5.25% coupon and a maturity of 20 yea..
Which bond can i expect to be called and why : Bond A is $1,000 par value with 14% annual interest for 20 years. Its current market price is $1,340.54. Its current yield is 10.44% and its yield to maturity is 9.62%. Which bond can I expect to be called and why?
Use as initial cash flow attributable to net working capital : Floral Shoppes has a new project in mind that will increase the accounts receivable by $19000, decrease accounts payable by $4000, increase fixed assets by $27000, and decrease inventory by $2000. What is the amount the firm should use as the initial..
Introduce bill regulating political intellegance : In the article entitled Lawmakers Plan to Introduce Bill Regulating Political Intellegance, Brody Mullins discusses potential legislation which would prohibit government officials from using political intelligence immediately after they leave office...
Investment classes had the highest volatility of returns : Over the period of 1926-2014, which one of the following investment classes had the highest volatility of returns?
What is your rate of return over six-month holding period : Six months ago, you purchased 1,200 shares of ABC stock for $21.30 a share. You have received dividend payments equal to $.60 a share. Today, you sold all of your shares for $22.70 a share. What is your total dollar return on this investment? What is..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the company forecast for net income

Bruto's sales for year 2015 were $79.57 millions of dollars. For that year the cost of sales without depreciation was 30%, the value of depreciation was 9% the value of sales, and interest expense was 20 millions of USD. Assuming that the income tax ..

  Homeowners of the remote-controlled security system

You are a researcher at Brave New World Interactive Communications Company. Sales to homeowners of the remote-controlled security system (using the new gesture-recognition microchip) have dropped 40% in the last quarter. Determine what type of inform..

  What is the current share price of your stock

You own 1,100 shares of stock in Avondale Corporation. You will receive a $2.40 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $72 per share. The required return on Avondale stock is 20 percent. what is the ..

  What is the largest payout possible for this call option

You own a call option on a stock and the strike price of the option is $30. The option has 3 weeks until expiration and the stock is currently priced at $35 per share. You paid $1 per put option and you bought 1 put option. What is the largest payout..

  Hedging in the futures markets can reduce all risk

Hedging in the futures markets can reduce all risk if:

  What is the capital gains yield

A stock price P0=$23, and is expected to pay D1 = $1.242 one year from now and to grow at a constant rate of g=8% in the future. Suppose this analysis was conducted in January 1, 2002, what is the expected price at the end of 2002 and what is the Cap..

  Banks composition of assets and liabilities

How does your bank's composition of assets and liabilities differ from averages for U.S. commercial banks? What explains these differences?

  Can the central bank keep output and inflation constant

Assuming lags in the AE and Phillips curves, can the central bank keep output and inflation constant? If it can, explain how;

  Compute the payback statistic for project

Compute the payback statistic for Project A and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 8 percent and the maximum allowable payback is four years.

  Different types of consumers based on survey data

Market research has identified three different types of consumers based on survey data. The following schedule gives the reservation prices of these customers for the two most popular products you sell. Can you use a “mixed bundling” strategy effecti..

  What is the market value of the firm prior to the recap

An all equity business has 100million shares outstanding selling for $20 a share. Management believes that interest rates are unreasonably low and decides to execute a leveraged recapitalization. It will raise $1 billion in debt and repurchase 50 mil..

  Calculate the value of the bond

You own a bond with a par value of $1000 that pays a $100 annual coupon. The bond matures in 15 years. Your required rate of return is 12% p.a. Calculate the value of the bond

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd