Purchase Solution

market value of the bond

Not what you're looking for?

Ask Custom Question

8. The Bonds of Microfood, Inc. carry a 10% annual coupon, have a $1,000 face value, and nature in 4 years. Bonds of equivalent risk yield 7%. The market value of the bonds should be (assume annual compounding):
a. $1,011.20
b. $1,087.25
c. $1,095.66
d. $1,101.62
e. $1,160.25

Purchase this Solution
Solution Summary

The market value of the bond is illustrated.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
Recent Feedback
  • "ty i have more need help with"
  • "ty i have jmore i need help with"
  • "great help"
  • "excellent help"
  • "Very helpful and easy to understand."
Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • Financial Accounting :MCQ

    a) the present value of the principle amount at the market (effective) rate of interest plus the present value of all future interest payments at the market (effective) rate of interest b) the present value of its principal amount at the market (effective

  • Bond Valuation Methods

    If required market rates are 8 percent, what is the value of the bond? b. If required market rates fall to 4 percent what is the value of the bond? c. If required market rates fall to 12 percent, what is the value of the bond? d.

  • Convertible Bond

    This is given as market value of bond/conversion ratio Market value of the bond = 105% X 1,000 = 1,050 conversion ratio = 22 market conversion price = 1,050/22 = $47.72 The solution explains how to calculate the conversion value and conversion price

  • Estimating fair value of a bond

    377873 Bond value is assessed. 1. Find the value of a bond with the following characteristics: (a) face value of $1,000, (b) 8% coupon rate, (c) the bond matures in 14 years, (d) the market rate of interest is 6%. 2.

  • Market value of a bond

    What is the approximate market value of the bond?

  • Bond Price

    If the yield and the coupon rate are the same, then the fave value and the market value are the same and the bond is par. The solution explains the impact on bond price of coupon rate and bond's yield

  • Conversion of Bonds

    : $900; Market Value of Convertible Bond: $1,000 Scenario B: Face Value of Bond: $1,000; Straight Value of Convertible Bond: $950; Market Value of Convertible Bond: $900 Assume the bonds are available for immediate conversion.

  • Bond Price and Interest Rate

    What are the prices of the two bonds if the relevant market interest rate for both bonds is 10 percent? b. If the market interest rate increases to 12 percent, what will be the prices of the two bond? c.

  • Economics - Money & Banking

    =1000*8%=$80 Number of coupon payments left=n=4 Maturity amount=Face Value=M=$1000 Market interest Rate=i=6% Fair Value of bond at the time of purchase= C/i*(1-1/(1+i)^n)+M/(1+i)^n Fair Value of bond at the time of purchase = 80/6%*(1-1/(1+6%

  • Value of Company Bonds with Interest Rates

    = 4115 =Price of bond Answer : The value of the bond when market interest rate = 16.00% is 4115 Calculates price of bonds at different market interest rates.

View More Related Solutions