Please see attached file. 2. An investor bought 100 shares of Venus Corporation common stock 1 year ago for $40 per share. She just sold the shares for $44 each, and during the year, she received four quarterly dividend checks for $40 each. She expects the price of the Venus shares to fall to about $38 over the next year.
Kennedy Gas Works has bonds which mature in 10 years, and have a face value of $1,000. The bonds have a 10 percent quarterly coupon (i.e., the nominal coupon rate is 10 percent). The bonds may be called in five years. The bonds have a nominal yield to maturity of 8 percent and a yield to call of 7.5 percent. What is the call pri
Impact of a Discount Berol Corporation sold 20-year bonds on January 1, 2008. The face value of the bonds was $100,000; and they carry a 9% stated rate of interest, which is paid on December 31 of every year. Berol received $91,526 in return for the issuance of the bonds when the market rate was 10%. Any premium or discount i
The XYZ's seven-year $1,000 par bonds pay 9 percent interest. Your required rate of return is 7%. The current market value for the bond is $1,100. i. Determine the expected rate of return ii. What is the value of the bonds to you given your required rate of return? iii. Should you purchase the bond at the current market p
An investor must choose between two bonds: Bond A pays $80 annual interest and has a market value of $800. It has 10 years to maturity. Bond B pays $85 annual interest and has a market value of $900. it has two years to maturity. a. Compute the current yield on both bonds. b. Which bond should be select based on your answer
Question 1. The primary advantages of a limited liability company are the: a. corporation taxation and the avoidance of any financial loss. b. ease of trading the shares of stock in the firm and the personal taxation of the net profits. c. limited liabilities for the limited partners and the control of management
Multiple Choice Questions: listing on a stock exchange, issuing securities, book value per share, after-tax cost of debt, Operating leases, financial lease, off-balance sheet lease financing, lease vs buy, conversion value of the bond, conversion price, before-tax yields, net advantage to leasing
1. Which of the following statements about listing on a stock exchange is most correct? a. Listing is a decision of more significance to a firm than going public. b. Any firm can be listed on the NYSE as long as it pays the listing fee. c. Listing provides a company with some "free" advertising, and status as a listed c
Two years ago, you acquired a 10-year zero coupon, $1000 par value bond at a 12 percent YTM. Recently you sold this bond at an 8 percent YTM. Using semiannual compounding, compute the annualized horizon return for this investment.
Calculate the duration of an 8 percent, $1,000 par bond that matures in the three years if the bond's YTM is 10 percent and interest is paid semi-annually. a) Calculate this bond's modified duration. b) Assuming the bond's YTM goes from 10 percent to 9.5 percent, calculate an estimate of the price change.
Assume that you purchased an 8 percent, 20 year, $1,000 par, semiannual payment bond priced at $1,012.50 when it has 12 years remaining until maturity. Compute: a) Its promised yield to maturity. b) Its yield to call if the bond is callable in the three years with an 8 percent premium.
The pretax cost of debt, the aftertax cost of debt, and determining the importance of pretax versus the aftertax cost of debt. Here's some background information: Previously, I issued a 30 year, 10% semiannual bond about 7 years ago. The bond is selling at 108% of the face value and the tax rate is 35% Thank you
A firm wishes to issue a perpetual callable bond. The current interest rate is 7%. Next year, the interest rate will be 6.5% or 8.25% with equal probability.
6) A firm wishes to issue a perpetual callable bond. The current interest rate is 7%. Next year, the interest rate will be 6.5% or 8.25% with equal probability. The bond is callable at $1,075, and it will be called if the interest rate drops to 6.5%. If the coupon were set to $70 what would the bond sell for? 7) A firm
Following are some examples from a practice book that I have. I am kind of confused with the answers, if somebody could help me, I will really appreciate it. Thanks, 1. The maturity value of a $15,000, 60-day, 5% note payable is _______. $15,750 $750 $15,125 $125 2. The following tot
Lyle and Kaye James are married, have two minor children, Jessica age 8 and Jerron age 4, and are filing a joint tax return in the current year.
1. Lyle and Kaye James are married, have two minor children, Jessica age 8 and Jerron age 4, and are filing a joint tax return in the current year. They are both employed. Lyle and Kaye, ages 38 and 37, respectively, have combined salaries of $240,000, from which $42,000 of federal income tax and $10,000 of state income tax are
Average Return, Standard Deviation of Return, Average Real Return for Treasury bills; Bond Valuation
Calculating Returns Refer to the following table: Year T-bills Inflation 1973 0.0729 0.0871 1974 0.0799 0.1234 1975 0.0587 0.0694 197
Gray House is issuing bonds paying $105 annually that will mature fifteen years from today. The bond is currently selling for $980. Calculate: (a) Coupon Rate (b) Current Yield (c) Yield To Maturity
Which of the following accounts in a merchandising company is affected by both the revenue cycle and another cycle?
Please answer the attached questions. Thanks! :) 1. Which of the following accounts in a merchandising company is affected by both the revenue cycle and another cycle? a. sales b. sales returns and allowances c. inventory d. accounts receivable e. accounts payable 2. The audit objective, "The accounts rec
Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bo
Stock, Bond, Warrants: speculative premium, nominal yield of the bond, par value of the common stock
1. The Burma Hat Company's warrant is trading for $10.20. The warrant carries the options to purchase two shares of common stock for $48.00. What is the speculative premium if the stock price is $51.03? 2.Allais Company's bond has a @114 annual coupon, maturing in 10 years at a value of $1,000 has a current market price of
Logan Corporation issued $800,000 of 8% bonds on October 1, 2006, due on October 1, 2011. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Logan Corporation closes its books annually on December 31. Instructions
RST Company sold $9 million of four-year, 8% debentures on July 1, 2007. The bonds sold to yield a real rate of 7%. Interest is paid annually on June 30. A. Determine the price of the bonds. B. Prepare an amoritization schedule for the bonds. C. Record the entry to the accounting system that is necessary to recognize interest
Complete problems: 1, 2, 3, 5, 6, 8, & 11 on text pp. 274-276 of Ch. 8. 1. Determine the value of a $1,000 denomination Bell South bond with a 7 percent coupon rate maturing in 20 years for an investor whose required rate of return is: a. 8 percent b. 7 percent c. 5 percent 2. Consider Allied Signal Corporation's perc
A corporate bond has a face value of $1,000, and pays a $50 coupon every six months (i.e., the bond has a 10 percent semiannual coupon). The bond matures in 12 years and sells at a price of $1,080. What is the bond's nominal yield to maturity
1. What category of mutual fund invests in stocks and bonds issued by corporations that have a history of socially responsible actions? 2. What category of mutual fund invests in risk oriented common stocks of new companies that promise large returns? 3. What category of mutual fund divides their investments among stocks,
11. The yield to maturity is: (Points: 3) the rate that equates the price of the bond with the discounted cash flows. the expected rate to be earned if held to maturity. the rate that is used to determine the market price of the bond. equal to the current yield for bonds priced at par.
Problem 1 On January 1, 2002, the ABC Corpoartion purchased a six-year, 12% bond having a maturity value of $300,000. The bond was purchased at a market price of $288,000 and provides an effective interest rate of 13%. The bonds are dated January 1, 2002 and mature on January 1, 2008.
Please help with the following problem. Provide step by step calculations. Assume it is early 2003 and the following bond quotations appeared in the Wall Street Journal: ConocoPhillips (COP) 5.900 Oct 15, 2032 95.972 6.200 90 30 88,510 Amerada Hess (AHC) 7.125 Mar 15, 2033 100.145 7.113 179 30 55,000 a. How much in an
1) A bond which has a yield to maturity greater than its coupon interest rate will sell for a price a. below par. b. at par. c. above par. d. what is equal to the face value of the bond plus the value of all interest payments. 2) A 20-year bond pays 12% on a face value of $1,000. If similar bonds are currently yieldi
1. What is the price today of a 2-year 9% coupon bond that has a par value of $1,000 and a required rate of return of 9%? 2. You have invested in a bond that pays semiannual coupon payments of $40 and has a par value of $1,000. The bond matures in 1 year, and its required rate of return is 10% compounded semiannually. Determi
Hi, I have questions for 2 problems , can somebody please help ? thanks Problem 1. Your uncle is interested in buying a certain stock, which he says is undervalued and should be worth $35 per share. He has asked for your help. The stock's dividend, currently at $1.10, is expected to increase at a rate of 5% per year forev