A firm issues ten-year bonds with a coupon rate of 6.8%, paid semiannually. The credit spread for this firm's ten-year debt is 0.8%. New ten-year Treasury notes are being issued at par with a coupon rate of 3.7%. What should the price of the firm's outstanding ten-year bonds be per $100 of face value? OA. $165.70 OB. $94.69 OC. $118.36 OD. $142.03

Q: Determine the present value of an increasing perpetuity-due with annual payments starting at 100 and…

A: An annuity is a payment series that provides a periodic sum to the annuity holder in exchange for a…

Q: You have estimated that your vehicle will need to be replaced 10 years from now at a cost of K120,…

A: Compound = quarterly = 4 Time = t = 10 * 4 = 40 quarter Future value = fv = K120,000 Interest rate =…

Q: Suppose I want to be able to withdraw P500,000 at the end of five years and withdraw another…

A: Present value is the estimation of the current value of future cash value which is likely to be…

Q: You placed $4,948 in a savings account today that earns an annual interest rate of 16.32 percent,…

A: compound = semiannually = 2 Present value = pv = $4948 Interest rate = r = 16.32 / 2 = 8.16% Time =…

Q: A company paid dividends of 12 cents per share this year. For the next five years, the company…

A: The dividend discount model (DDM), a mathematical technique for predicting the price of a company's…

Q: 8) Find the modified internal rate of return (MIRR) if Williams Engineering, PLLC finances money at…

A: Modified internal rate of return(MIRR) is used to evaluate capital investment projects . It…

Q: Suppose you have a project that has a 0.5 chance of tripling your investment in a year and a 0.5…

A: The standard deviation of the rate of return is used in order to estimate the extent to which a…

Q: What is the percentage margin of a margin call if an investor has purchased $10,000 worth of…

A: A margin money under margin call is an important concept in capital market or stock market trading.…

Q: You are currently 25 years old and landed your first job. Your retirement plan will make monthly…

A: To determine the amount that you can withdraw monthly in retirement, we can use the concept of a…

Q: Which of the following places more pressure on ethics officers to monitor financial and sales…

A: As a direct result of the Sarbanes-Oxley Act, more of the burden for supervising the reporting of…

Q: a. Why are ratios useful? What are the five major categories of ratios? b. Calculate D'Leon's 2019…

A: Ratio analysis is a method used to evaluate the financial performance and health of a company. It…

Q: On May 3, 2020, Leven Corporation negotiated a short-term loan of $660,000. The loan is due October…

A: Ordinary interest is a type of interest that is calculated based on the original principal amount of…

Q: You would like to have $550,000 when you retire in 40 years. How much should you invest each quarter…

A: compound = quarterly = 4 Future value = fv = $550,000 Time = 40 * 4 = 160 quarters Interest rate = r…

Q: Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either…

A: Part (a): Answer: The present value of the portfolio is $ 74561 Calculation of expected cash flows:…

Q: Marin Inc. loans money to John Kruk Corporation in the amount of $1,024,000. Marin accepts an 8%…

A: firms can also raise funds by issuing loans to each other. One of the ways to raise such loans is…

Q: Credit standards are an important element of a firm's credit policy. What are credit standards, and…

A: Each firm deploys a credit policy that is used to provide goods and services at credit to the…

Q: A 3-month zero-coupon bond is selling for $99.7 and a 10-year zero-coupon bond is selling for $54.3.…

A: It is the case of calculation of spread in yields given by 3-month maturity bonds and 10 years…

Q: A man wants to set up a 529 college savings account for his granddaughter. How much would he need to…

A: Annual Deposit is that amount which is required to deposit by investor every year for receiving the…

Q: Using the data in the table, if the soybean farmer hedged in 2004, what hedge price did she receive?…

A: When the farmers wish to sell their products, they expect to sell it at a higher price. Thus, their…

Q: What is the lower bound for the price of a 7-month European call option on a dividend-paying stock…

A: A call option gives the right but not the obligation to buy at the strike price. The lower bound of…

Q: Two stocks each currently pay a dividend of $1.30 per share. It is anticipated that both firms'…

A: The problem is going to use the expected rate of return formula (CAPM model) to calculate the…

Q: Jimenez Enterprises recently paid a dividend of $1.95. It currently expects to have a growth rate in…

A: Current dividend = d0 = $1.95 Growth rate for first two years = G = 8% Constant growth rate = g = 4%…

Q: If Bob borrowed $30,000, the bank would charge an interest rate of 4% p.a. compounded semi-annually.…

A: Semi-Annual payment made at the beginning will be calculated using formula :   Semi-Annual payment =…

Q: X and Y are offered the rates (per annum) below on a $5 million 10-year investment. X needs fixed…

A: An interest rate swap is when two parties want either the fixed or the floating rate. In the case…

Q: A regression analysis between sales (Y) and advertising (X) (both in dollars) resulted in the…

A: In finance we often use regression equation to determine the relationship between two variables.…

Q: Indicate whether each of the following statements is true or false. Support your answers with the…

A: Dividend policy refers to the set of guidelines and principles that a company uses to determine how…

Q: You have taken a loan of $92,000.00 for 35 years at a 4.9% annual interest rate, with interest…

A: Annual payments are made to service the loan. But the interest rate is compounded quarterly. We can…

Q: A stock had returns of 17.53 percent, -4.95 percent, 20.18 percent, and 8.47 percent for the past…

A: The scatter in the distribution of all the data points in a data set is taken into consideration by…

Q: Considering the following bond: 5 year, semi-annual bond, 0.11 coupon, 0.055 YTM. Par is 1000. What…

A: A bond is a debt instrument that raises capital from investors. It is considered one of the most…

Q: Square Hammer Corporation shows the following information on its 2018 income statement: Sales =…

A: Cash flow to stockholders: It represents the cash paid to the shareholders by the company. This…

Q: You have just negotiated a home mortgage with a principal of $350,000. The bank's quoted rate is…

A: Principal, interest, taxes, and insurance are the usual four components of a mortgage payment. The…

Q: Luis Rivera has taken out a mortgage loan for $225,000 at 4% for 5 years. What will be the total…

A: A mortgage is a type of loan that is typically used to purchase real estate, such as a house or a…

Q: Assume a $270,000 investment and the following cash flows for two products: Year Product X Product 1…

A:

Q: Consider the prevailing condition of inflation (including changes in global oil price), the economy,…

A: The bond market is the market where firms issue bonds and raise funds in the market. There is an…

Q: Telemundo Ltd. borrows K100, 000 from AB bank. The loan is to be repaid in 1year with periodic…

A: To calculate the monthly charge for the loan, we first need to determine the interest rate per…

Q: What nominal rate of interest compounded semi-annually can be used instead of 10 % comp. monthly…

A: We need to determine the effective annual rate that would equal the 2 compounding methods. The…

Q: Q5. You are anticipating receiving a stream of regular monthly cash flows, with the first payment of…

A: The future value of a growing annuity is the expected value at a future point in time of a series of…

Q: You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no…

A: Bonds are the one of debt security which is issued by corporations or government for financing.…

Q: Below is information regarding the capital structure of Micro Advantage Incorporated. On the basis…

A: The WACC refers to the average return that the company provides to all its stakeholders. It takes…

Q: Decreasing the number of years of a loan decreases the amount of interest repaid over the term of…

A: A loan is a contract between two parties where money is exchanged in return for a promise of…

Q: How has your opinion on personal finance changed

A: The personal finance is the finance which is associated with the management and saving of money so…

Q: As a graduating senior with a promising career in finance, Central Bank offers you a mortgage of…

A: A mortgage is a loan used to purchase a property or real estate. The property serves as collateral…

Q: Staton-Smith Software is a new start-up company and will not pay dividends for the first five yea of…

A: Here, Annual Cash Dividend paid at the end of six years (D6) is $3.50 Constant Growth Rate of…

Q: Jimstan & Jimstan Corp. can sell a new 10-year bond with an annual coupon of 5% and a face value of…

A: Tax deductions for outstanding debts can reduce the effective cost of debt paid by a borrower…

Q: As of 2015, farms were taxed at 10 percent for income up to $46,000; at 24 percent for income…

A: Tax is computed at a certain rate on different slabs of income . In a progressive tax system, the…

Q: A​ BBB-rated corporate bond has a yield to maturity of 8.2%. A U.S. Treasury security has a yield to…

A: A treasury bill is a kind of debt security issued by the government and private companies for…

Q: An insurance company must make payments to a customer of $10 million in one year and $4 million in…

A:

Q: Trina opened a deposit account on December 1, 2016 with a deposit of $5 000. She added $2000.00 on…

A: The concept of money's time value indicates that any sum of money is worth more currently than what…

Q: Find the simple interest. Principal Rate Time in Months $10000 8% 9 The simple interest is $ (Round…

A: Simple interest refers to the interest earned on the principal amount invested for a period of time…

Q: What would the CAT stock value be if the constant growth rate were 5% instead of 4%? (The current…

A: Stock value with constant growth in dividend With required rate of return (r), constant growth rate…