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# Bonds

### Bond price interpretation

What does it mean - 8% bonds issued at 102 1/2?

### Financial Managment

Please see the attached file. Understanding Returns 6-1 You purchase 1,000 shares of Spears Grinders, Inc. stock for \$45 per share. A year later, the stock pays a dividend of \$1.25 per share, and it sells for \$49. a. Calculate your total dollar return. b. Calculate your total percentage return. c. Do the answers to p

### Financial Management

Please see the attached file. Valuation Basics 1. A best selling author decides to cash in on her latest novel by selling the rights to the book's royalties for the next four years to an investor. Royalty payments arrive once per year, starting one year from now. In the first year, the author expects \$400,000 in royalties

### Bond Valuation

Consider the two bonds described below Bond A Bond B Maturity(years) 15 20 Coupon rate(0%) 10 6 Paid semiannually Par Value \$1,000 \$1,000 a. If both bonds had a req

### Bond Valuation

A \$1,000 par value bond sells for \$1,216. It matures in 20 years, has a 14 percent coupon, pays interest semiannually, and can be called in 5 years at a price of \$1,100. What is the bond's YTM and YTC? YTM YTC a. 6.05%; 9.00% b. 10.00%; 10.26% c. 10.06%; 12.00% d. 11.26%; 14.00% e. 11.26%; 10.00%

### Bond Valuation

The Stuart Corporation has excess cash to invest in one of two securities. The company's tax rate is 40 percent. The first alternative is a 10-year, 10 percent coupon bond (with semiannual interest payments) that has a current price of \$1,000 and a yield of 10 percent. The second alternative is the preferred stock of Pickett

### CAPM and Cost of Equity

If I have a company whose beta is .54,the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5% annually) and an assessment that the market risk premium is 6.5%, using the CAPM equation,what is the present cost of equity of my company? If I have 2 companies, A and B, the beta of A is .

### Bonds: Implied Rates

At your favorite bond store, Bonds R Us, you see the following prices: One year \$100 zero selling for \$90.19 Three year 10% coupon \$1000 par bond sell for \$1000 Two year 10% coupon \$1000 par bond selling for \$1000. Assume that the expectations theory for the term structure of interest rates holds, no liquidity premiu

### Current Price of bonds

Consider a bond with a 7% annual coupon and a face value of \$1000. Complete the following table Year to Maturity Yield to Maturity Current Price 3 5 ? 3 7 ? 6

### Sam McKenzie is the founder and CEO of McKenzie Restaurants, Inc., a regional company. Sam is considering opening several new restaurants. Sally Thorton, the company's CFO, has been put in charge of the capital budgeting analysis. She has examined the potential for the company's expansion and determined that the success of the new restaurants will depend critically on the state of the economy next year and over the next few years.

Sam McKenzie is the founder and CEO of McKenzie Restaurants, Inc., a regional company. Sam is considering opening several new restaurants. Sally Thorton, the company's CFO, has been put in charge of the capital budgeting analysis. She has examined the potential for the company's expansion and determined that the success of the

### What is the maximum price you should be willing to pay for the bond?

Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has face value of \$1,000 and makes semiannual interest payments. If you require an 11.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

### Balance Sheet

Please see the attached file. I need to really understand this balance sheet because I'm going to take a text. Can you please explain to me more clearly how the additional information was used to create the Balance Sheet? Are 8 additional points, can you use different colors for each explanation point

### Right to repurchase a debt issue

Corporations typically have the right to repurchase a debt issue prior to maturity at a fixed price, but only after some number of years have passed. Such debt is said to feature: a. a sinking fund. b. a balloon payment. c. a redeemable-at-par provision. d. a deferred call.

### What happens to the price of a bond that pays a fixed percent of the face value every year when interest rates in the economy increase.

What happens to the price of a bond that pays a fixed percent of the face value every year when interest rates in the economy increase.

### Calculating total real return on the investment in bonds.

Calculating Investment Return You bought one of Bergen Manufacturing Co.'s 8% coupon bonds one year ago for \$1,028.50. These bonds make annual payments and mature six years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7%. If the inflation rate was 4.8% over the past year, what

### Determine market price and yield

The US government issues a 1-year bond with a face value of \$1,000 and a zero coupon. The market interest rate is 10 percent, what is the market price of the bond? If that bond price falls by 5 percent, what happens to its yield?

### Imagine you have \$1000 to invest. Pick a treasury retail security you would buy and explain the structure of the security and your rationale for purchasing it.

Please, help Imagine you have \$1000 to invest. Pick a treasury retail security you would buy and explain the structure of the security and your rationale for purchasing it. 2. Research various treasury securities using the websites in Materials below. 3. Post a 200- to 250-word response to the scenario above. https://

### In 2003, the U.S. national debt totaled approximately 6.7 trillion dollars, or roughly \$100,000 per family in the United States.

Dear OTA: Could you please answer the following: In 2003, the U.S. national debt totaled approximately 6.7 trillion dollars, or roughly \$100,000 per family in the United States. Although the government has occasionally paid off parts of the debt, in general the amount is growing rapidly. Should the government/private citi

### Currencies: Real interest rate, effective return

1.) Suppose the nominal interest rate in the US is 7.5% and US inflation is 3.5%. Also the Canadian dollar spot rate is 0.8574 and the Japanese yen spot rate is 0.00688. Finally, the 90-day forward rate for the Canadian dollar is 0.8493 and for the Japanese yen is 0.00700. If we assume the Fisher equation, interest rate parity,

### Define benefit and cost externalities.

2. Define benefit and cost externalities. Explain why situations involving benefit externalities tend to result in an underallocation of society's scarce resources, and why situations involving cost externalities tend to result in an overallocation of society's scarce resources. 12. The Learned Book Company has a choice of p

### Expected five-year growth rate by dividing the PEG ratio by the forward looking P/E ratio.

Go to Yahoo! Finance at http://finance.yahoo.com/ and look up the stock information for a publicly traded company of your choosing. If you already know your publicly traded company's stock symbol, all you have to do is enter the letters in the "Get Quotes" field near the top of the page and then press the "Go" button. If you hav

### Market interest rate, rd

The market interest rate, rd, for a given bond increased, then the price of the bond would decline. Applying this same logic to stocks, explain (a) how a decrease in risk aversion would affect stocks' prices and earned rates of return, (b) how this would affect risk premiums as measured by the historical difference between retur

### You work for the corporate treasurer of a publicly-owned corporation whose stock trades on the New York Stock Exchange.

You work for the corporate treasurer of a publicly-owned corporation whose stock trades on the New York Stock Exchange. The firm needs to issue debt to raise capital for various projects, and its current debt is rated A. (The firm will only be issuing debt for these projects.) Decisions regarding the type of debt, the amount, th

### Convertible bond and rates of return

Laser Electronics Co. has \$30 million in 8% convertible bonds outstanding. Conversion rate is 50; the stock price is \$17; and the bond matures in 15 years. The bonds are currently selling at a conversion premium of \$60 over their conversion value. If the price of the common stockrises to \$23 on this date next yesr, what would

### A 6-year Circular File bond pays interest of \$80 annually and sells for \$950.

Bond Pricing. A 6-year Circular File bond pays interest of \$80 annually and sells for \$950. What are its coupon rate, current yield and yield to maturity?

### Bond Price with Face Value, Current Yield and Coupon Rate

Bond Yield. A bond with face value \$1,000 has a current yield of 7% and a coupon rate of 8%. What is the bond's price?

### Carol Chastain purchases a one-year discount bond with a face value of \$1,000 for \$862.07. What is the yield of the bond

Carol Chastain purchases a one-year discount bond with a face value of \$1,000 for \$862.07. What is the yield of the bond?

### Present value of a bond

Write the equation which expresses the present value (or price) of a bond that has an 8% coupon (annual payments), a 4-year maturity, and a principal of \$1,000, if yields on similar securities are 10%

### Interest payments to the US Debt

What does the interest paid each year on the US debt mean? Compare this feature to that of a household and a hypothetical household's debt load?

### Price a bond should sell at

A bond recently issued matures in 15yrs. They have a par value of \$1000 and an annual coupon of 6%. If the current market interest rate is 8% at what price should the bonds sell? I have tried using Excel and the numbers don't make sense when I put them into the formula.