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Bond Valuation

Returns on stocks and bonds questions

An issue of common stock is expected to pay a dividend of $4.0 at the end of the year. Its growth rate is equal to 3%, and the current share price is $40. What is the required rate of return on the stock? a) between 7% and 10% b) between 10% and 12% c) between 12% and 14% d) between 14% and 17% An issue of com

Beta Coefficients, Cost of Equity, and Expected Rate of Return

Please help me with the following problem pertaining to the value of Beta for Wal-Mart: Using the PC Quote Web Page find the value of beta for your reference company. a. What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfol

Coupon rate, yield to maturity, and bond's yield

1. A semiannual coupon bond is currently selling for $1,142.12. The bond has a maturity of 10 years and a yield to maturity of 7%. Determine the coupon rate of the bond. A) 6% B) 7% C) 8% D) 9% 2. A corporate bond has an annual coupon rate of 8%, payable semiannually, and a maturity of 25 years. Determine th

Calculate: Bond Yields and Pricing

Please answer the following questions about bond yields and pricing. 1. A bond with a face value of $1,000 has a current yield of 7 percent and a coupon rate of 8 percent. What is the bond's price? 2. A 6-year Circular File bond pays interest of $80 annually and sells for $950. What are its coupon rate current yield and yie

Bonds Payable - calculate issue price and amortize premium

Need assistance with b, c and d. Part (a) is complete. Worksheet is attached. I am confused with premium amortization the calculations and journal entries. Bonds Payable - calculate issue price and amortize premium. On January 1, 2009, Learned, Inc. issued $60 million face amount of 20-year, 14% stated rate bonds when market

A 20-year bond with a 7.50% semi-annual coupon bond was sold at par 10 years ago.

Please help with the attached file. I. A 20-year bond with a 7.50% semi-annual coupon bond was sold at par 10 years ago. Now the 10-year semi-annual payment corporate bond has a required return (or YTM) of 8.25%. Calculate the bond's market price. The par level of bonds is $1000. II. a) What is the duration of a 2-year bond

Using Bond Quotes

Suppose the following bond quotes for IOU Corp. appear in the financial page of today's newspaper. Assume the bond has a value of $1000 and the current date is April 15,2007. What is the yield to maturity of the bond? What is the current yield? What is the yield to maturity on a comparable U.S. Treasury issue?

CPI, annual compound inflation rate, dollar cost of investment , nominal interest rate, real interest rate, realized real interest rate, current price of the bond, realized annual rate of return, compounded annual rate of return on investment,

1. If the CPI today is equal to 135 and five years ago it was 105, then the annual compound inflation rate is approximately 2. A deposit of $1,000 invested at 3.75%, compounded annually, will be worth approximately how much at the end of 5 years? 3. Assume that a proposed investment will generate revenue of $3,000 at t

Valuation of known cash flows

Assume that all of the bonds listed in the following table are the same except for their pattern of promised cash flows over time. Prices are quoted per $1 of face value. Use the information in the table and the Law of One Price to infer the values of the missing entries. Assume that the coupon payments are annual. coupon

Payback Method, Compute Cash Flow, Compute Price of Bonds

I would like to have these problems worked out in Word format please. Problem 1) You are called in as a financial analyst to appraise the bonds of the Holtz Corporation. The $1,000 par value bonds have a quoted annual interest rate of 14 percent, which is paid semiannually. The yield to maturity on the bonds is 12 percent an

Bond Valuation: Interest and Semiannual Compounding

Please use Excel and show a cash flow time line to solve the following: I'm purchasing a 10-year bond with a $1,000 face value that pays interest of $60 semiannually. The yield to maturity is 10 percent with semiannual compounding. What price should I pay for the bond?

Investment questions: nominal annual return, effective annual rate, bond's market price, one-year interest rate expected one year from now, duration of a five-year bond, decrease in the market rates of interest, discount quote, commercial paper, T-Bill, annuity, mortgage, foreign exchange rate, ARM, fixed rate mortgages

Assume all bonds have a face value of $1,000.00, unless otherwise informed 1. You buy an investment today for $9,825. You sell the investment in 90 days for $10,000. a. What is the nominal annual return on this investment? b. What is the effective annual rate on this investment? 2. A 10 year semi-annual payment c

Balance Sheet & Bonds

How does an increase in the firm's balance sheet debt affect the credit quality/rating and valuation of its bonds?

What is the discount yield, bond yield, and effective annual return on a $1million Treasury bill? Calculate the T-bill's quoted discount yield. Calculate the T-bill's bond equivalent yield. Calculate the discount yield and bond equivalent yield on the commercial paper. Calculate the conversion value of each bond. Calculate your monthly payments on this mortgage. What is mortgage sale?

1. What is the discount yield, bond yield, and effective annual return on a $1million Treasury bill that currently sells at 97 3/8 percent of its face value and is 65 days sells at maturity? 2. Suppose you purchase a T-bill that is 125 days from maturity for $9,765. The T-bill has a face value of $10,000. a. Calculate the T

NPV, Bond Price & Stock Price

3. NPV: You have an opportunity to invest in a business that will pay $200,000 in one year, $400,000 in two years, $600,000 in three years and $800,000 in four years. You can earn 12% per year compounded annually on a mutual fund that has similar risk. If it costs $1.2 million to start this business, what is the NPV & should yo

Bonds stocks and reserve requirements

1. Johnson Motors' bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $1000 par value, and the coupon rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds? 2. A 10-year, 12% semiannual coupon bond with a par value of $1000 sells for $1100.

Bond Value

What is the percentage of face value for a $1000 bond that is a 6% semi-annual coupon bond with 10 years remaining before maturity and a zero coupon bond with 10 years remaining until maturity if the market yield is 8%. Please show me the steps to solve this. Thank you.

Portoflio and Risk

Suppose you owned a portfolio consisting of $250,000 worth of long-term U.S. government bonds. a. Would your portfolio be riskless? b. Now suppose you hold a portfolio consisting of $250,000 worth of 30-day Treasury bills. Every 30 days your bills mature, and you reinvest the principal ($250,000) in a new bach of bills. As

Bond Return

What is the % market yield on a $1,000 bond that currently sells for $627.76 that is an 8% coupon rate bond that has 15 years remaining before maturity? Is it 7, 8, 14, or 16% and how do you solve this? Please show me the steps. Thank you.

Question about Yield Curve

Need help with this problem (practice exercise): Suppose you and most other investors expect the inflation rate to be 7% next year, to fall to 5% during the following year, and then to remain at a rate of 3% thereafter. Assume that the real risk-free rate, r*, will remain at 2% and that maturity risk premiums on Treasury secu

Current Yield and Yield to Maturity of a bond

You hold a 10-year-maturity coupon bond that was issued 9 years ago with a coupon rate of 10%. If the interest rate on 1-year bonds is now at 5%, calculate the current yield and yield to maturity for your 10-year-maturity bond, and compare these with the coupon rate. If the interest rate on the 1-year bonds is now at 12%, calc