Zero coupon bond with face value

Assignment Help Financial Management
Reference no: EM131060838

A zero coupon bond with a face value of $1,000 is issued with an initial price of $565.01. The bond matures in 20 years. What is the implicit interest, in dollars, for the first year of the bond's life?

Reference no: EM131060838

Questions Cloud

What is the price of the stock today : A7X Corp. just paid a dividend of $1.40 per share. The dividends are expected to grow at 17 percent for the next eight years and then level off to a growth rate of 5 percent indefinitely. If the required return is 12 percent, what is the price of the..
Manufacture and export of products : International trade allows a country to specialize in the manufacture and export of products that it can produce efficiently, and import products that can be produced more efficiently in other countries.
Federal government bond-corporate bonds : Joan purchases a 30 year Federal Government bond for $10,000 that pays 4 percent annual interest. Jim purchases $20,000 worth of 30 year Corporate bonds that pay 7 percent annual interest. Joan's goal is to earn $400 per year on her investment, and J..
Health services information systems : Explain and describe various strategic planning models and how they may apply in different settings. Describe an EHR migration path, and distinguish a migration path from strategic plan, implementation plan, and transition strategy.
Zero coupon bond with face value : A zero coupon bond with a face value of $1,000 is issued with an initial price of $565.01. The bond matures in 20 years. What is the implicit interest, in dollars, for the first year of the bond's life?
Problem regarding the issues of the organization : The consultant and the leadership agree that in order to fix the "people" issues of the organization, there will need to be a culture shift of leadership and employee interactions so that a trustcan be rebuilt.
What is the weighted average cost of capital : You are provided the following information: Debt $ 90000 Equity $ 90000 The shares trade at $ 10; the growth rate is 7%. Dividends last year were $ 1.00. What is the WACC if the CFO decides on changing the capital structure to 60% debt and 40% equity..
Determine the maximum compressive strain emax in the pipe : A 4.5 in. outside diameter polyethylene pipe designed to carry chemical wastes is placed in a trench and bent around a quarter-circular 90° bend (see figure). The bent section of the pipe is 46 ft long.
What does treatment mean square measure : What does treatment mean square (MSTR) measure and what does error mean square (MSE) measure and Suppose that you want to perform a one-way ANOVA to compare the mean losses among the three types of robberies. What conditions are necessary

Reviews

Write a Review

Financial Management Questions & Answers

  Examples of asset-backed securities

Two specific, real-world examples of asset-backed securities with appropriate maturities and how they compare to a Treasury security of the same maturity in terms of the spread over the Treasury yield

  Investor company reports equity income

If the investor company owns 30% of the stock of the investee company and the investee company reports profits of $ 150,000, then the investor company reports equity income of

  Considering two independent projects

You are considering two independent projects. The required return for both projects is 13 percent. Project A has an initial cost of $139,600 and cash inflows of $48,200, $54,600, and $68,700 for Years 1 to 3, respectively. Given this information, whi..

  What is the future value if payments are ordinary annuity

What is the present value of the payments if they are in the form of ordinary annuity? What is the present value if the payments are annuity due? Suppose you plan to invest the payments for five years. What is the future value if the payments are an ..

  What is the future value of the annuity

You have $50,000 in your bank account. You plan to save $5,000 at the end of each year for the next 10 years. The interest rate is 8% per annum, compounded monthly. What is the future value of the annuity (ordinary)?

  Income and cash flow analysis

The Berndt Corporation expects to have sales of $11 million. Costs other than depreciation are expected to be 60% of sales, and depreciation is expected to be $2.2 million. Suppose Congress changed the tax laws so that Berndt's depreciation expenses ..

  According to the pilot run-estimate the learning rate

You’ve just completed a pilot run of 10 units of a major product and found the processing time for each unit was as follows: UNIT NUMBER TIME (HOURS) 1 970 2 640 3 420 4 380 5 320 6 250 7 220 8 207 9 190 10 190. According to the pilot run, what would..

  Which firm is subject to a higher degree of translation

Comparing degrees of translation exposure. Based on the information provided, which firm is subject to a higher degree of translation exposure? Explain.

  Explain how a terrorist attack might affect an mnc

Given the information in question 1, do you expect that Key West Co. is more concerned about the adverse effects of political risk or of financial risk? Explain how a terrorist attack might affect an MNC.

  Make the presidents replacement economically advantageous

In 2006, Violet Rose Computer Corporation purchased a new quality inspection system for $550,000. The estimated salvage value was $50,000 after 10 years. Currently the expected remaining life is 7 years with an AOC of $27,000 per year and an estimate..

  Would the firms break-even point increase or decrease

Schweser Satellites Inc. produces satellite earth stations that sell for $100,000 each. The firm’s fixed costs, F, are $2 million, 50 earth stations are produced and sold each year, profits total $500,000, and the firm’s assets (all equity financed) ..

  Larger percentage of capital structure in debt

What types of firms tend to have a larger percentage of capital structure in debt? What non-financial factors may affect a firm’s target capital structure?

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