4b. The semiannual, 8-year bonds of Alto Music are selling at par and have an effective annual yield of 8.6285 percent. What is the amount of each interest payment if the face value of the bonds is $1,000?
Q: David is taking out an amortized loan for $13,000 to buy a new car and is deciding between the…
A: Loan Amount = $13,000 Bank Time Period = 6 Years Interest Rate = 5.7% Online Lender Time Period =…
Q: Mr Jeffrey wants to renovate his house. He takes a personal loan of RM 45000 from a bank with an…
A: Personal loan amount "PV" is RM 45000 Interest rate is 5% per annum Time period is 6 years To Find:…
Q: Enterprise, Inc. bonds have an annual coupon rate of 14 percent. The interest is paid semiannually…
A: Here, Coupon rate is 14% Time Period is 13 years Par Value is $1,000 YTM is 8%
Q: Inflation and interest rates) Assume the expected inflation rate is 4.4 percent. If the current…
A: Nominal interest rate is interest rate including the inflation and real interest rate.
Q: AnswerUS dollars after the arbitrage.
A: Given exchange rate quotation:- S$1 = $0.60£1 = $1.50£1 = S$2.60 The arbitrageur in order to…
Q: For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot…
A: A call option is a contractual agreement that gives the option buyer the right but not the…
Q: The boom in IPO activity has been mainly credited to the surge in SPACs (special purpose acquisition…
A: SPACs (special purpose acquisition vehicles) are known as blank check companies and such companies…
Q: how does crowdfunding work size of crowdfunding stages of crowdfunding
A: Crowdfunding is referred as the practice for the project funding or venture through raising the…
Q: Please provide working to the solution for the question below: You have just graduated and need…
A: Solution:- Interest rate is also known as opportunity cost. So, the amount of loan granted will be…
Q: What is the payback period (in annual terms) of the following cashflow stream?
A: Payback Period: It refers to the period in which the initial cost of investment or project is…
Q: PLEASE DO THIS TYPEWRITTEN AND SKIP IT IF YOU HAVE ALREADY DONE THIS, OTHERWISE DOWNVOTE. I WILL…
A: The question is related to Capital Budgeting. 1. Payback Period is the length of time required to…
Q: You Answered Correct Answer John is considering acquiring a couple of Citigroup bonds, which were…
A: A bond is a debt instrument used by institutions to raise capital. Bonds can be issued by companies…
Q: FALSE O TRUE O An employee a LaserKinetics.com borrows $10,000 on May 1 and must repay a total of…
A: Interest Can be computed as per the formula given below. Interest = Total Amount at Maturity -…
Q: Consider the following two scenarios whereby the cost-of-carry model is violated. You are required…
A: Arbitrage Strategy :- It means taking advantage of price difference. Various investor use this…
Q: Part 1 The nominal rate of interest would be enter your response here%.
A: Nominal rate of interest = ((1+real interest rate)*(1+inflation rate))-1
Q: Question 2: Boisjoly Product Company is considering two mutually exclusive projects' annual expected…
A: Mutually exclusive projects The term "mutually exclusive projects" is typically used in the capital…
Q: National Corporation is a no growth firm and has 2 million shares outstanding. It is expected to…
A: To calculate the current value of stock we will use the below formula Current price per share =…
Q: National Corporation is considering buying common shares in ABC Corporation. National Corporation…
A: Given: Expected dividend = P400 Risk free rate = 7.5% Beta = 1.75 Market return = 11.3% Growth rate…
Q: Calculate the present worth of 11 uniform payments of $7,200 that begin 1 year from now at an…
A: Present worth is the present value of future payment now (i.e in zero period), which is calculated…
Q: Calculate the return on equity (after tax) ratio. (Round your answers to the nearest hundredth.)…
A: Return on Equity: It is a measure of the profitability of a company and it is estimated by dividing…
Q: Prokter and Gramble (PG) currently has $25 billion outstanding debt. PG has a cost of equity capital…
A: Earnings before interest and taxes: Earnings before interest, depreciation and taxes are the…
Q: You bought a split type aircon and decided to avail a buy now, pay later - zero % interest scheme.…
A: Monthly Payment P 3,800.00 Time Period 12 Months Interest rate 0%
Q: Explain in detail, using examples where possible, the difference between hedging, speculation
A: In the world of finance and investments hedging and speculation are important concepts. Many…
Q: From a corporation’s point of view, how does preferred stock differ from common stock?
A: Preferred investors have a greater right to distributions (such as dividends) than the common…
Q: 2. Kingston Development Corp. purchased a piece of property for $2.79 million. The firm paid a down…
A: Solution:- When a loan is taken, it can either be repaid as a lump sum payment or in installments.…
Q: PLEASE DO THIS TYPEWRITTEN AND SKIP IT IF YOU HAVE ALREADY DONE THIS, OTHERWISE DOWNVOTE. I WILL…
A: The question is related to Capital Budgeting. 1. Payback Period is the length of time required to…
Q: 500,000 units of a product per year is being produced by a company and sells them for P4 million.…
A: Break even point can be calculated using the formula given below Break Even Point = Fixed Cost /…
Q: Tater and Pepper Corp. reported COGS for 2021 of $33 million. Tater and Pepper listed $6.6 million…
A: Given: Particulars Amount Cost of goods sold $33.00 Millions Inventory $6.60 Millions…
Q: A3) Finance Suppose that the risk-free interest rate is 10% per annum with continuous compounding…
A: Future is referred as the contract of purchase or sell at the specified asset at fixed price in time…
Q: The DDB Corporation wants to purchase a new machine for its factory operations at a cost of P…
A: Data given: Cost of Machinery = P 800,000 Annual cash flows =P 400,000 n= 5 years Salvage value =…
Q: What are the correct portions assigned to principal interest of the final payment?
A: Loan (mortgage) amortization schedule refers to a schedule which is prepared to shows the periodic…
Q: Probabilities for net cash flows for 3 years of a project are as follows: Year 1 Year 2 Year 3 Cash…
A: The expected cash flow is the given cash flow times the respective probability.
Q: Compute for the: 1.Equity value 2. Firm value
A: Dividend discount model refers to a stock valuation model which is used by the company for…
Q: What is the present value nually?
A: Present value refers to the current value of the future stream of payments based on the interest…
Q: What are the pros and cons of a private equity recapitalization?
A: Private Equity Recapitalization: A private equity recapitalization is a financial technique of…
Q: Answer all questions below. a) In December 2005, the spot exchange rate for the British Pound was…
A: Forward exchange rate Forward exchange rate is calculated considering the covered interest parity…
Q: compounded daily. Answer the questions below. Do not round any intermediate computations, and round…
A: More is compounding of interest more is annual effective interest rate and more is accumulated…
Q: A bond's market price is $1,175. It has a $1,000 par value, will mature in 8 years, and has a…
A: Here, To Find: Yield to Maturity (YTM) =?
Q: QQ Company's book value per share at the end of last year was $60, its earnings per share for the…
A: The Price Earnings Ratio is calculated by dividing Current Market Price per share by Earnings per…
Q: A private school wins $90000 in the first year that it established. These revenues increased to…
A: Here, Amount in first year (PV) = $90,000 Amount in ten years (FV) = $100,000 To Find: Gradient…
Q: Find the present worth of cash flows of $1000 that start now (time 0) and continue through year 10,…
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…
Q: A stock is currently selling for $52.01 a share. A call option on this stock with an exercise price…
A: Spread is a strategy where a person takes the position of both holder and writer. Bull Spread with…
Q: OC) 0.1105
A: Price weighted index value refers to the price per share compared with the weights of the…
Q: Face value=$1000 Annual coupon payment=$60 (First payment due in 1 year) Internal yield to…
A: Solution:- Macaulay’s Duration measures the immunizing period i.e. the period where price effect is…
Q: Why is TIME the portfolio manager’s best friend?
A: Portfolio manager: Portfolio managers are specialists that manage investment portfolios in order to…
Q: Find the present value of the following annuities: 500 payable semi-annually for 10 years if the…
A: Solution:- When an equal amount is paid each period, it is called annuity. Present value of annuity…
Q: 40. Joel Embi, Inc. has an ROA (return on assets) of 15.2 percent, total assets of $4,500,000 and a…
A: Return on asset (ROA) ROA is calculated as shown below. ROA=Net incomeTotal assets Net profit…
Q: What is factory equipment an example of? A. A liability B. Revenue C. An expense D. An asset
A: Answer - Meaning of Asset - An asset is a resource that owned or controlled by a company which…
Q: what is the best alternative?
A: Present Value: It is the present value of the future stream of cash flows. It is estimated by…
Q: PLEASE DO THIS TYPEWRITTEN AND SKIP IT IF YOU HAVE ALREADY DONE THIS, OTHERWISE DOWNVOTE. I WILL…
A: The question is related to Capital Budgeting. 1. Payback Period is the length of time required to…
4b. The semiannual, 8-year bonds of Alto Music are selling at par and have an effective
annual yield of 8.6285 percent. What is the amount of each interest payment if the face value of
the bonds is $1,000?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 2. DEF Company will issue $8,000,000 in 10%, 10-year bonds when the market rate of interest is 7%. Interest is paid semiannually. Required: a. Will this interest structure result in a Premium for DEF company or a Discount? b. How much cash will be received from the issuance of the bond? c. How much will the semi-annual interest payment be on the bond?a. An 8 ½%, 25-year, $1,000 bond is presently selling at a yield-to-maturity (YTM) of 9 4%. Assuming annual interest payments, what should you pay for the bond? b. What should you pay if interest is paid semiannually? c. Instead of a 25-year bond, they decide to issue 15-year bonds with annual payments. What should you pay for this bond if the YTM is 9 4%? Explain the differences in prices changes for (3a) and (3c) in terms of maturity. d. You buy an 8%, 15-year, $1,000 bond that pays interest annually when it is selling with a YTM of 7%. Immediately after you buy the bond, the YTM increases to 9%. What was the percentage change in the price of the bond? A bond has a market price that exceeds its face value. What type of bond is this? Describe the relationship between the coupon rate and the YTM. е.Q1) He Omani Company has two bond issues outstanding. Both bonds pay OMR (100) annual interest plus OMR (1000) face value at maturity. Bond L has a maturity of 15 years, sell after three years issued, and Bond S has a maturity of 1 year. A. What will be the value of each of these bonds when the going rate of market interest is 12%? B. what can you conclude from the results of the above questions regarding the bond risks?
- Use the following tables to calculate the present value of a $25,000, 7%, 5-year bond that pays $1,750 ($25,000 × 7%) interest annually, if the market rate of interest is 7%. Present Value of $1 at Compound Interest. Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 0.90703 0.89000 0.87344 0.82645 3 0.86384 0.83962 0.81630 0.75132 4 0.82270 0.79209 0.76290 0.68301 5 0.78353 0.74726 0.71299 0.62092 6 0.74622 0.70496 0.66634 0.56447 7 0.71068 0.66506 0.62275 0.51316 8 0.67684 0.62741 0.58201 0.46651 9 0.64461 0.59190 0.54393 0.42410 10 0.61391 0.55840 0.50835 0.38554 Present Value of Annuity of $1 at Compound Interest Periods 5% 6% 7% 10% 1 .95238 .94340 .93458 .90909 2 1.85941 1.83339 1.80802 1.73554 3 2.72325 2.67301 2.62432 2.48685 4 3.54595 3.46511 3.38721 3.16987 5 4.32948 4.21236 4.10020 3.79079 6 5.07569 4.91732 4.76654 4.35526 7 5.78637 5.58238 5.38929 4.86842 8 6.46321 6.20979 5.97130 5.33493 9 7.10782 6.80169 6.51523 5.75902…(Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 11 years until maturity. You can purchase the bond for $875. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 8 percent? a. The yield to maturity on the Saleemi bonds is %. (Round to two decimal places.)1 (Related to Checkpolnt 9.2) (Yield to maturity) Hoyden Co.'s bonds mature in 15 01 percent interest annually. If you purchase the bonds for $1,075, what is their yield to maturity? years and pay The yield to maturity on the Hoyden bonds is %. (Round to two decimal places.) 01 11 05 11 05 11 04 04
- Use the following tables to calculate the present value of a $791,000, 5%, 6-year bond that pays $39,550 ($791,000 × 5%) interest annually, if the market rate of interest is 6%. Present Value of $1 at Compound Interest Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 0.90703 0.89000 0.87344 0.82645 3 0.86384 0.83962 0.81630 0.75131 4 0.82270 0.79209 0.76290 0.68301 5 0.78353 0.74726 0.71299 0.62092 6 0.74622 0.70496 0.66634 0.56447 7 0.71068 0.66506 0.62275 0.51316 8 0.67684 0.62741 0.58201 0.46651 9 0.64461 0.59190 0.54393 0.42410 10 0.61391 0.55839 0.50835 0.38554 Present Value of Annuity of $1 at Compound Interest Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 1.85941 1.83339 1.80802 1.73554 3 2.72325 2.67301 2.62432 2.48685 4 3.54595 3.46511 3.38721 3.16987 5…1.Using annual compounding, find the prices of the following bonds with $1,000 par value: a. A 7%, 10 year bond priced to yield 8%Q4. A long term bond with a face value of $10,000 has a bond interest rate of 6% per year pay: quarterly. What are the amount of the interest payments? (a) $160 (b) $150 (c) $170 (d) $155 (e) your answer (... ......)
- Use the following tables to calculate the present value of a $515,000, 5%, 5-year bond that pays $25,750 ($515,000 × 5%) interest annually, if the market rate of interest is 10%. Present Value of $1 at Compound Interest Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 0.90703 0.89000 0.87344 0.82645 3 0.86384 0.83962 0.81630 0.75131 4 0.82270 0.79209 0.76290 0.68301 5 0.78353 0.74726 0.71299 0.62092 6 0.74622 0.70496 0.66634 0.56447 7 0.71068 0.66506 0.62275 0.51316 8 0.67684 0.62741 0.58201 0.46651 9 0.64461 0.59190 0.54393 0.42410 10 0.61391 0.55839 0.50835 0.38554 Present Value of Annuity of $1 at Compound Interest Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 1.85941 1.83339 1.80802 1.73554 3 2.72325 2.67301 2.62432 3.16987 4 3.54595 3.46511 3.38721 3.16987 5 4.32948 4.21236 4.10020 3.79079 6 5.07569 4.91732 4.76654 4.35526 7 5.78637 5.58238 5.38929 4.86845 8 6.46321 6.20979 5.97130 5.33493 9 7.10782…Use the following to answer questions 1 – 3 (Round answers to the nearest dollar) O Corp issues 5%, 20-year bonds with a total face amount of $1,000,000. The market interest rate for bonds of similar risk and maturity is 5%. Interest is paid annually. 1. $ How much will be paid in interest each interest payment? 2. $ (rounded to nearest dollar). What is the present value of the interest payments? 3. $4 What is the issue price of the bond?Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,075. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.) Part 2 b. You ▼ should should not purchase the bonds because your yield to maturity on the Saleemi bonds is ▼ greater less than the one on a comparable risk bond. (Select from the drop-down menus.)