A 10-year, 7% coupon bond with a face value of $1,000 is currently selling for $871.65. Compute your rate of return if you sell the bond next year for $880.10
Q: To save for graduate school, a student invests $2220 semiannually in an ordinary annuity with 7%…
A: Semi annual investment amount (P) = $2220 Interest rate = 7% Semi annual interest rate (r) = 7%/2 =…
Q: ind the amount needed to deposit into an account today that will yield a typical pension payment of…
A: Annual payment (P) = $15000 Period (n) = 28 Years Interest rate (r) = 4.9%
Q: result of winning the Gates Energy Innovation Award, you are awarded a growing perpetuity. The…
A: Present value of the growing perpetuity = Cash Flows / ( Discount Rate - Growth Rate
Q: 1)The 11% convertible debt of Grey plc is convertible in four years’ time at a rate of 25 shares per…
A: (Answer 1) Given in the question, Convertible bond market price,=Interest p.v. + conversion interest…
Q: how did you end up with the number 11.4619, I cannot seem to figure out how or what I should type…
A:
Q: rate of interest is typically the required rate of return on a three-month Philippine Treasury bill.
A: The risk free rate is a rate of return that is free from any kid of risk. This is the return an…
Q: Keys Corporation's 5-year bonds yield 5.10% and 5-year T-bonds yield 4.40%. The real risk-free rate…
A: The DRP (Default Risk Premium) is a payment made to financial lenders or investors in the event that…
Q: our company has been doing well, reaching $1.15 million in earnings, and is considering launching a…
A: Here, Depreciation is 7 Year MACRS Depreciation Rate of Depreciation under MACRS Depreciation for…
Q: For an interest rate of 12% per year, compounded quarterly, the effective interest per six months is…
A: APR = 12% Number of compounding per year (m) = 4
Q: What is the firm's cost of equity?
A: Cost of Equity: It represents the cost of raising capital for the issuer from the equity investors.…
Q: Determine the expected present worth of the following cash flow series if each series may be…
A: Expected present worth can be defined as the mean or average value of the given variables which…
Q: Two-year Treasury securities yield 6.7 percent, while 1-year Treasury securities yield 6.3 percent.…
A: The long-term interest rate, according to the expectations theory of the term structure, is a…
Q: Kareem received a retroactive salary payment of $100,000 and has decided to invest the full amount…
A: When you meet the criteria for margin trading, you can borrow money against your existing stocks to…
Q: Given the following portfolio: Buy one call option on the stock XYZ with a strike price of $51.1 at…
A: In case of buying call option, the profit arises when the market price of stock before expiry rises…
Q: Time-share sales provide an opportunity for vacationers to own a resort condo for 1 week (or more)…
A: Here, Annual maintenance fees = $400 per year To Find: Part a). Monthly payment =? Part b). Total…
Q: ABC Construction Corporation is planning to purchase STUVW Mining Corporation which is owned by S,…
A: When two or more companies join together or one company tends to acquire the other company, it is…
Q: Consider the following potential investment. A 40-unit apartment building, built in 1980, is listed…
A: a) Gross potential Rent is the total amount the investor would receive without any scope of facing…
Q: Suppose you put $ 450 a month for retirement into an annuity earning 4.25% compounded monthly. If…
A: Monthly deposit (P) = $450 Future value required (FV) = $500,000 Interest rate = 4.25% Monthly…
Q: A firm currently pays a dividend of $3.50, the stock price is $65 and a constant growth rate of 6…
A: Current dividend (D0) = $3.50 Stock price (P0) = $65 Growth rate (G) = 6%
Q: If you want to earn 15% annual simple interest on an investment, how much should you pay for a note…
A: Maturity amount = $6750 Interest rate = 15% Period = 10 months
Q: tising program's net presen o the nearest whole dollar.
A: NPV = Present value of future cashoutflows -Present value of cashinflows.
Q: After spending a year and $50,000, you finally have the design of your new product ready. In order…
A: Given: Raw material = $30,000 Market value of used machine = $100,000 Tax rate = 25%
Q: An equally-weighted portfolio that consists of 13 stocks has a beta of 1.5. If you replace one of…
A: Here, Total no. of stocks = 13 Beta = 1.5 Beta of the stock that was replaced = 1.07 Beta of…
Q: Mr. Smith is purchasing a $90000 hoyse. The down payment is 20% of the price of the house. He is…
A: A mortgage is a loan that is repaid by equal installments over a period of time. The installments…
Q: Over the period of 1926-2017, which one of the following had the highest volatility of returns? U.S.…
A: Of all the investmenst, i,e long and short bonds, shares, small company stock are more volatile as…
Q: What will the new earnings per share be if the firm uses its excess cash to complete a stock…
A: Stock Repurchase: Also known as buyback, it is a decision made by the firm to repurchase its shares…
Q: Assume that the risk-free rate is 4% and the required return on the market is 11%. What is the…
A: Risk free rate = 4% Market return = 11% Beta = 1.39
Q: Explain the following terms Authorized Share Capital Issued Share Capital Bonus Shares
A: 1) Authorized Share Capital It refers to maximum number of shares a company is allowed to issue…
Q: Five years ago, you entered into a 10-year investment with a simple interest of 4% per annum and a…
A: One time principal = P Simple interest for first 5 years (r) = 4% Compounded interest for next 3…
Q: The yield to maturity on 1-year zero-coupon bonds is currently 5.5%; the YTM on 2-year zeros The…
A: Bonds are referred to as debt instruments that are issued by the government or corporates to raise…
Q: Use the double-declining-balance method to make a depreciation schedule for a piece of equipment…
A: The double declining balance method of depreciation is an accelerated method of depreciation in…
Q: a. What is the market value of its equity? b. What is the market value of its debt? c. What…
A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…
Q: retail coffee company is planning to open 105 new coffee outlets that are expected to generate $15.7…
A: NPV = Free Cashflow/( WACC - Growth)
Q: . The value of a Bitcoin by the end of 2021 was 60.573€, the inflation in Europe is 6%. The…
A: Rate of exchange change according to inflation and interest rate in the market.
Q: If you want to be paid from a 15 year ordinary annuity with a guaranteed rate of 4.277% compounded…
A: Annual payment (C) = $10,000 Period (n) = 15 Years rate (r) = 0.04277 (i.e. 4.277%) Present value or…
Q: Let’s pretend that we will buy a brand-new car online. How much is the car? How much is your…
A: When an asset is purchased is on loan, the purchaser pays down payment upright and then, the…
Q: Suppose we observe the prices of 7-year zero-coupon (with a face value of $91.36) and year 6-to-7…
A: Zero coupon bond refers to the bond issued at discount. Zero coupon bond is a debt security that…
Q: A new generator has been installed. There will be no maintenance cost until the end of the sixth…
A: Initially, total value shall be calculated for future expenses at the end of year 5 and then such…
Q: ACE Ltd is evaluating whether it should invest in a machine that costs $100,000. The machine would…
A: Operating cash flows is the cash flow generated from normal operations of business. It can be…
Q: Three-year Treasury securities currently yield 6 percent, while 4-year Treasury securities currently…
A: Nothing says "safety of principal" like Treasury securities when it comes to conservative…
Q: Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal interest…
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: Assume you have created a 2-stock portfolio by investing $30,000 in stock X with a beta of 0.8, and…
A: Expected Return and Standard deviation of each stock is calculated using below formula For…
Q: a) The Hanover based company, We Know Capital Limited (WKC), has been hired as consultants by a…
A: The Weighted Average Cost of Capital(WACC) refers to the financial ratio that calculates the overall…
Q: Redtail Hawk Company is evaluating two possible investments in depreciable plant assets. The company…
A: The payback period is one of the simplest methods of capital budgeting that is used in calculating…
Q: A credit card statement shows the following activity Compute the finance charge if 1.5% is charged…
A: Credit card statement shows all the payment done by the card and their is some interest would…
Q: 3. Your company has purchased a large new truck-tractor for over-the-road use for $220,000. It's…
A: Depreciation = (Truck Cost - Salvage Value)/Useful life of Truck = (220000 - 10000)/10 = $21000 In…
Q: Calculate the tax rate if the tax amount is $ 64.50 on a purchase of $780?
A: Tax amount = $64.50 Purchase = $780
Q: Leverage relates to how much of someone else’s money a business or individual is using to finance…
A: Leverage refers to the use of borrowed money by a company to fund or to finance its growth or its…
Q: Phoenix Motors wants to lock in the cost of 10,000 ounces of platinum to be used in next quarter's…
A: Here, Required Platinum is 10,000 ounces Future Contract Rate is $950 per ounces Time Period of…
Q: Robotics stock's required return is 12.6%, the risk-free rate of return is 2.15%, and the market…
A: Required rate = 12.6% Risk free rate = 2.15% Market risk premium = 8%
A 10-year, 7% coupon bond with a face value of $1,000
is currently selling for $871.65. Compute your rate of
return if you sell the bond next year for $880.10
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- The current interest rate on a 10-year coupon bond (with face value= $1000 and annual coupon rate= 3.25%) is 1.31%. The buyer of this bond will receive $_____ payment from the bond issuer every year before maturity while holding the bond.You purchase a 6%, 20-year annual coupon bond for its face value. You will hold this bond for two years in your portfolio (till you receive coupon payments for both years), after which you will sell it. After two years, the market rate is 7%. How much will your bond sell for? What will be your percentage return? a. $899.41 and 1.94% respectively b. $1,000 and 0% respectively c. $899.41 and -4.06% respectively d. $894.06 and 1.41% respectivelyA three-year bond with $1,000 face value and 10% coupon rate is sold for $1,000 today. If one year later the market interest rate increases to 15%, then this bond will have a market price of _______ next year.
- Today an investor purchases a 30-year bond (face value =\$1,000) for $627.73. The bond has a coupon rate of 4% and a yield to maturity of 7%. It pays coupons annually (not semiannually). The investor plans to hold the bond for 1 year. If the yield to maturity of the bond becomes 8% at the end of the year, what is the bond rate of return over the year?A bond is currently selling for $1040. It pays the amounts listed in the picture at the ends of the next six years. The yield of the bond is the interest rate that would make the NPV of the bond’s payments equal to the bond’s price. Use Excel’s Goal Seek tool to find the yield of the bond.The current interest rate on a 10-year coupon bond (with face value = $1,000 and annual coupon rate = 3.25%) is 1.31%. The buyer of this bond will receive $ _________ payment from the bond issuer every year before maturity while holding the bond. Question 7 options:
- A bond pays a coupon of $35 semi-annually. The bond matures in 9 years and you will receive $1,000 at that time. If the required return is 9%, how much should you be willing to pay for the bond today? Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate. AnswerThe market price of a 10-year bond is 957$, its yield to maturity is 8% per year, and annual coupon payments are equal to 957$. The face value of the bond is $1000. Calculate the present value of the bond. Would you buy it? The answer is to be written in the reasons box. Round your answer to the nearest tenth. Optional: Provide calculation details in the reasons box. Answer: Give your reasonsA 10-year bond with a face value of $1,000 has a coupon rate of 9.0%, with semiannual payments. a. What is the coupon payment for this bond? b. Enter the cash flows for the bond on a timeline. a. What is the coupon payment for this bond? The coupon payment for this bond is $ every six months. (Round to the nearest cent.)
- A 14-year, $1000 par value Fingen bond pays 9 percent interest annually. The market price of the bond is $1100, and the market's required yield to maturity on a comparable-risk bond is 10 percent. (Use microsoft excel) a. Compute the bond's yield to maturity b. Determine the value of the bond to you, given your required rate of return. C. Should you purchase the bond?A 6-year bond pays interest of $80 annually and sells for $950. What are its coupon rate and YTM?A 30-year, $1,000 par value bond has an annual payment coupon of 7.5%. The bond currently sells for $910. What is the future value of the bond?