Yield to maturity on similar a bonds

Assignment Help Finance Basics
Reference no: EM131697249

(Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 15 years with an annual coupon rate of 8 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 11.5 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 12.5 percent. What will be the price of these bonds if they receive either an A or a AA rating?

The  price of the Pybus bonds if they receive an A rating will be? (round in nearest cent)

Reference no: EM131697249

Questions Cloud

Accounting cycle for a fictional business : Discuss the elements of a supply chain-What are the steps involved in producing an order and shipping it to the customer-how can company ensure ethical behavior
Expected rate of return : Carl Jones is considering whether to invest in a newly formed investment fund. The fund's investment objective is to acquire home mortgage.
Display and print customer balance detail and contact list : On April 1, 2017, Lynn Garcia started her business, Lynn's Music Studio. Display and print Customer Balance Detail and Contact List
Describe academic and career plans and any special interest : Describe your academic and career plans and any special interest (for example, undergraduate research, academic interests, leadership opportunities, etc.).
Yield to maturity on similar a bonds : If they receive an A rating, the yield to maturity on similar A bonds is 12.5 percent. What will be the price of these bonds if they receive either.
Maturity on a? comparable-risk bond : The? market's required yield to maturity on a? comparable-risk bond is 10 percent. The current market price for the bond is $1,080.
Determine the variable overhead spending variance : Understanding Relationships, Incomplete Data, Overhead Analysis Lynwood Company produces surge protectors. To help control costs, Lynwood employs a standard.
Maturity on a? comparable-risk bond : The 13?-year ?$1,000 per bonds of Vail Inc. pay 13% percent interest. The? market's required yield to maturity on a? comparable-risk bond is $1,080 percent.
Savings plan that has quarterly payments : Assuming an 4.65% rate of return, compounded quarterly, how much interest would a person earn in a savings plan that has quarterly payments of $155

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the effective rate for 6-month bills

Assume that 3-month treasury bills totalling $12 billion were sold in $10,000 denominations at a discount rate of 3.605%. In addition, the treasury department sold 6-month bills totaling $10 billion at a discount rate of 3.55%.

  Advise a mnc about its one year investment plan next year in

Euro against U.S. dollar As a financial analyst, you are asked to advise a MNC about its one-year investment plan next year in Germany. Because the investment is denominated in euros, you are asked to forecast how the euro's value may change against ..

  Stock valuation calculations

This homework submission should include all calculations, completed on the designated tab of the Homework Student Workbook

  Youve observed the following returns on crash-n-burn

youve observed the following returns on crash-n-burn computers stock over the past five years 5 percent -13 percent 24

  Shareholders interests rather than their own

Are managers of firms with formidable takeover defenses more or less likely to act in the shareholders' interests rather than their own?

  Prepare a breakeven point for the top management

How might the service plan to maintain generators be used by GEI to provide a future revenue stream and prepare a breakeven point (BEP) for the top management of the firm. One thing they were sure to investigate was how quickly their investment wou..

  First attempt and pass on the second attempt

The probability that a student passes the written test for a private pilot's license is 0.75. What is the probability that John will fail on the first attempt and pass on the second attempt?

  Differentiate between the following types of markets

What is a market? Differentiate between the following types of markets: physical asset markets versus financial asset markets, spot markets versus futures markets, money markets versus capital markets, primary markets versus secondary markets, and pu..

  What is the present value of the given annuity

What is the present value of the following annuity? $1,125 every year at the end of the year for the next 8 years, discounted back to the present at 17.34 percent per year, compounded annually?

  Finding the arithmetic mean of returns

Assume you know that someone invested $1,500 in the Ec140 mutual fund 10-years ago, Now you learn that their balance in the fund has increase to $9,245.

  Calculate the unlevered price-to-sales ratio

Unlevered (Enterprise) Multiples (Easy) A firm reported $250 million in total as.sets and $140 in debt. It had no interest-bearing securities among its assets.

  The manager of sensible essentials conducted an excellent

the manager of sensible essentials conducted an excellent seminar explaining debt and equity financing and how firms

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