Explore BrainMass

Explore BrainMass

    Present Value/ Value calculation for Allied Signal Corp.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Consider Allied Signal Corporation's 9 7/8 percent bonds that mature on June 1, 2010. Assume that the interest on these bonds is paid and compounded annually. Determine the value of a $1,000 denomination Allied Signal Corporation bond as of June 1, 2004, to an investor who holds the bond until maturity and whose required rate of return is:

    A. 7 percent

    B. 9 percent

    C. 11 percent

    D. What would be the value of the Allied Signal Corporation bonds at an 8 percent required rate of return if the interest rate were paid and compounded semianually?

    © BrainMass Inc. brainmass.com June 3, 2020, 9:16 pm ad1c9bdddf
    https://brainmass.com/business/bond-valuation/present-value-value-calculation-allied-signal-corp-174210

    Solution Preview

    To solve the problem, search the internet for an online calculator to calculate or use a financial calculator. I am using a financial calculator for the solution.

    First, Set up known facts:
    - Future Value = ...

    Solution Summary

    The solution solves and finds the present value of Allied Signal bonds at differing rates of return.

    $2.19

    ADVERTISEMENT