Assume that you purchase a $3,000 bond issued by Kohls that pays 6 percent interest each year, paid every 6 months. What is the amount of each interest payment? (Round your answer to 2 decimal places.) Multiple Choice $18.00 $90.00 $180.00 $9.00 $3,000.00
Q: A Disney Corporation 10 year Bond is issued with a $1,000 par value and pays a 10% coupon. After two…
A: Bond price is the aggregate of present value of all coupon payments and present value of face value…
Q: project requires initial asset investment of $1 million. The asset will last for 8 years, and will…
A: [(cost of machine* CCA rate*tax rate/CCA rate + required return) *( 1+05.* Required return/1+…
Q: A project will produce an operating cash flow of $164,000 a year for three years. The initial cash…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: Cirice Corp. is considering opening a branch in another state. The operating cash flow will be…
A: IRR is the internal rate return that is based on time value of money and is most used for capital…
Q: Nancy is a widow with two teenage children. Nancy's gross income is 54200 per month, and taxes take…
A: Insurance Nancy should purchase=annual disposable income *8 times= Gross Annaul Income * (1-Taxes)*…
Q: Year 0 1 2 3 Expected net cash flows -90 60 40 20 The project's cost of capital is 10%. What is the…
A: NPV can be calculated by following function in excel=NPV(rate,value1,[value2],…) + Initial…
Q: Just because a project's payback period is relatively long doesn't mean it is not profitable in the…
A: Simple payback period= initial cost / annual savings
Q: Which of the following statements are true assuming that all assets satisfy CAPM? a) Low-beta…
A: CAPM (Capital Asset Pricing Model) is a financial model used to determine expected return on an…
Q: Great Wall Manufacturing has a beta of 1.4. The risk-free rate of return is currently 5 percent and…
A: Beta of the stock (b) = 1.4Risk-free rate (Rf) = 0.05Market return (Rm) = 0.16Required return (r) =…
Q: A property produces a first year NOI of $300,000 which is expected to grow by 3% annually. If the…
A: Sales price is the present value of operating income based on the growth rate and required rate of…
Q: Remex (RMX) currently has no debt in its capital structure. The beta of its equity is 1.44. For…
A: Unlevered cost of equity is the cost of equity when there is no debt in the capital structure of the…
Q: Prokter and Gramble (PKGR) has historically maintained a debt-equity ratio of approximately 0.19.…
A: The intrinsic value of a company can be ascertained through financial analysis using the FCFF (Free…
Q: Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume…
A: Here, YearNP-30NX-200 $ (971,000.00) $ (700,000.00)1 $ 440,000.00 $ 290,000.002 $ 440,000.00 $…
Q: livia recently bought a house for $355,000 using a 10 year home loan with 4.25% interest rate. She…
A: Mortgage loans are paid by equal monthly installments and these installments carry the payment for…
Q: Yellow Day has a project with the following cash flows: Year Cash Flows 0 -$ 26,700 1 10,400 2…
A: Future value can be calculated usingFV = PV* (1 + r / n)ntWhere,PV = Present valueFV = Future valuer…
Q: Mike Jones bought a new split-level home for $150,000 with 20% down. He decided to use Quicken Loans…
A: Present value of annuity is computed as follows:-PV= A*wherePV= Present value of annuityA= annuityr=…
Q: Which one of the following should be assumed about a project that requires a $100,000 investment at…
A: The cost of the project = $100000Revenue/benefits to be received from the project= $20000*5= $100000
Q: Your firm is considering a project that will cost $4.59 million up front, generate cash flows of…
A: The internal rate of return (IRR) calculates the profitability of investments. It is the rate at…
Q: Goodstuff Corporation has total equity of $494 million and 138 million shares outstanding. Its ROE…
A: Total Equity = e = $494 millionNumber of Share = n = 138 millionReturn on Equity = roe =…
Q: 2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the…
A: The cost of debt can be referred to as the cost or the minimum required return that the company…
Q: You purchase a zero coupon bond with 12 years to maturity and a yield to maturity of 4.93 percent.…
A: Zero coupon bonds are not given any coupon but are issued at discount and discount is implicit…
Q: Calculate the duration of a five-year bond with a face value of $1,000 and a coupon rate of 8%.…
A: Duration of the bond is the period required to recover all cash flows from the bond and the is…
Q: SHON Bruno's Lunch Counter is expanding and expects operating cash flows of $27,900 a year for 4…
A: One financial metric used to assess an investment's or project's profitability is net present value,…
Q: A coupon bond that pays interest semiannually has par value of $1,000 , matures 8 years, and has a…
A: Bond price will be the aggregate of present value of all coupon payments and present value of face…
Q: Prices of a futures contract for 5 consecutive trading-days are provided in the table below. The…
A: Futures are standarized contracts used for hedging purposes.In futures , there is mark to market…
Q: Fallway, Inc. had current assets of $121,800 and current liabilities of $114,300 last year. This…
A: Net working capital is the difference between current assets and current liabilities.Net working…
Q: The only capital investment required for a small project is investment in inventory. Profits this…
A: The net cash flow from the project is calculated by the following formula,
Q: $17.50 per share is the current price for Foster Farms' stock. The dividend is projected to increase…
A: Accroding to Gordon's grwoth model, P =whereP= current stock priceD= expected dividendr= required…
Q: The Fitness Studio, Incorporated’s income statement lists the following income and expenses: EBITDA…
A: Income tax is paid or calculated after deduction of all allowable expenses such as depreciation and…
Q: Emerson Cammack wishes to purchase an annuity contract that will pay him $7,000 a year for the rest…
A: Maximum value of payment is the present value of payments from the annuity based on the time value…
Q: Consider the following zero coupon bonds: Bond Yrs to Mat. Yield to Maturity a 1…
A: The forward rate refers to the return that is assumed as provided by the longer-term security over…
Q: The Campbell Company is considering adding a robotic paint sprayer to its production line. The…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: Which of the following supply chain distribution techniques is used to minimize the amount of time…
A: In this question, we are required to determine the technique used to minimize the time goods stay in…
Q: Stormy Weather has no attractive investment opportunities. Its return on equity equals the discount…
A: We need to use the formulas below to find the unknown variables from table.Growth rate = ROE…
Q: Fama's Llamas has a weighted average cost of capital of 9.4 percent. The company's cost of equity is…
A: WACC means weighted average cost of capital.It is calculated as follows:-WACC =…
Q: Assume today's settlement price on a CME EUR futures contract is $1.3148/EUR. You have a long…
A: In future contracts there is need of margin balance in the account and there is daily settlement of…
Q: You purchased a 5-year annual-interest coupon bond year agoIts coupon interest rate was 6%, and its…
A: The holding period return on a bond is the total return earned by an investor over the duration of…
Q: Your company currently has 7% coupon-rate bonds (coupons are paid semi-annually) with ten years to…
A: Compound = Semiannually = 2Assuming face Value = fv = $1000First BondCoupon Rate = c1 = 7 / 2 =…
Q: A bond that settles on June 7, 2016, matures on July 1, 2036, and may be called at any time after…
A: Yield to maturity can be calculated by following function in excel=RATE (nper, pmt, pv, [fv],…
Q: (Evaluating liquidity) The Allen Marble Company has a target current ratio of 2.0 but has…
A: The objective of the question is to find out how much additional short-term funding Allen Marble…
Q: Ghost Riders Co. has an EPS of $1.64 that is expected to grow at 8.4 percent per year. If the PE…
A: Expected EPS after 7 years= EPS today ( 1 + g ) ^7Price after 7 Years= EPS after 7 years * PE ratio
Q: You must evaluate a proposal to buy a new milling machine. The purchase price of the milling…
A: The net present value (NPV) is a key capital budgeting technique for project and investment…
Q: You invested three thousand US dollars and purchased shares of a German corporation when the…
A: Foreign exchange is that amount which shows the relationship between the country's currency. With…
Q: On January 1, James Industries leased equipment to a customer for a six-year period, at which time…
A: Equipment Cost = $760,000Fair value = $760,000Lease period = 6 YearsResidual Value after 6 years =…
Q: fter a long career an engineer retires with $1.4 million in a retirement account. The engineer…
A: In retirement planning money should be sufficient to meet the income needed on retirement based on…
Q: A stock has a beta of 1.9. The risk-free rate is 2%. Assume that the CAPM holds. What is the…
A: According to CAPM (Capital asset pricing model) ,k =Rf+[ b*(Rm-Rf)]wherek= expected return for the…
Q: 30. ABC Inc.'s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $105…
A: YTM is also known as Yield to maturity. It is a capital budgeting technique which helps in decision…
Q: Sparkling Water, Incorporated, expects to sell 3.7 million bottles of drinking water each year in…
A: Here,ParticularsValuesNumber of bottles sold3700000.00Selling price per bottle $ 1.46Cost price per…
Q: Assume a 30 year fixed rate, fully amortizing mortgage for $260,000 at a stated rate of 5% fees,…
A: Payment per period can be calculated using PMT function in excel.PMT(rate, nper, pv, [fv],…
Q: Required information [The following information applies to the questions displayed below.] Cardinal…
A: IRR is also known as Internal Rate of Return.. It is a capital budgeting technique which helps in…
Assume that you purchase a $3,000 bond issued by Kohls that pays 6 percent interest each year, paid every 6 months. What is the amount of each interest payment? (Round your answer to 2 decimal places.)
Multiple Choice
$18.00
$90.00
$180.00
$9.00
$3,000.00
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- You intend to purchase a 10-year, $1,000 face value bond that pays interest of $60 every 6 months. If your nominal annual required rate of return is 10 percent with semiannual compounding, how much should you be willing to pay for this bond? Select one: O a. $1,124.62 O b. $1,086.15 O c. $ 957.50 O d. $826.31 O e. $1,032.20Calculate the amount of simple interest payable if a person borrowed $25 500 at a simple interest rate of 12% over a three-year period. Select one: a. $9 000.00 b. $10 326.00 c. $9 180.00 d. $3 060.00eBook The interest rate on one-year Treasury bonds is 2.0 percent, the rate on two-year T-bonds is 1.9 percent, and the rate on three-year T-bonds is 1.8 percent. Using the expectations theory, compute the expected one-year interest rate in the second year (Year 2 only). Round your answer to one decimal place. _____ % Using the expectations theory, compute the expected one-year interest rate in the third year (Year 3 only). Round your answer to one decimal place. _____ %
- Listen Assume that there is a bond that pays $20.00 at the and of year 2, and $105.00 at the end of year 7. It sells at a total =$(20.00+105.00). The Macauley duration of the bond is? Answer with two digits decimal accuracy. Blank Excel Worksheet Your AnswerAn investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? A) $828. B) $893. C) $1,000. D) $1,686. *PV of $1 ordinary annuity is 17.15909: n = 40; i = 5% **PV of $1 is 0.14205: n = 40; i = 5% O A O BThe Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,155. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%.
- You intend to purchase a 9-year, $1,000 face value bond that pays interest of $65 every 6 months. If your nominal annual required rate of return is 11.6 percent with semiannual compounding, how much should you be willing to pay for this bond? $1,106.94 $1,076.94 $1,086.94 $1,096.94 $1,066.94Two types of bonds are offered to you for bond investment considerations: P10,000, 5-year, 10% p.a. Debenture bond issued by Yoo Hoo corp. The interest payable twice a year. The bond has four years remaining term and is offered to you at 98-1/2. P5,000, 10-year, 10% p.a. Mortgage bond issued by Khoo Coo, Inc. Interest is paid annually. The bond still has 7 years remaining life before its maturity. It is offered to you by a friend at 101-3/4. It has been your policy that your desired rate of return for unsecured investment should be 12% p.a, and for secured investment will earn a minimum of 8% p.a. 1. Based on the above information, compute the exact yield to maturity (YTM) of the two bonds offered. 2. Which bond you wish to invest? Explain thoroughly why.Two types of bonds are offered to you for bond investment considerations: P10,000, 5-year, 10% p.a. Debenture bond issued by Yoo Hoo corp. The interest payable twice a year. The bond has four years remaining term and is offered to you at 98-1/2. P5,000, 10-year, 10% p.a. Mortgage bond issued by Khoo Coo, Inc. Interest is paid annually. The bond still has 7 years remaining life before its maturity. It is offered to you by a friend at 101-3/4. It has been your policy that your desired rate of return for unsecured investment should be 12% p.a, and for secured investment will earn a minimum of 8% p.a. Based on the above information, compute the value of the bond for the two types of bonds offered.
- What would you pay for a $195,000 debenture bond that matures in 15 years and pays $9,750 a year in interest if you wanted to earn a yield of: Click here to view factor tables. (a) 3%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Amount to pay tA $You're considering an investment in 10-year, $1,000 face value bonds that pay 8.50% annually and sell for $1,033.55. If you do make the purchase, how much will you earn? Select one: O a. 8.00% O b. 8.50% Oc. 7.59% Od 8.25% Oe. 8.86% Clear my choice AA Series EE U.S. government savings bond accrues 3.5% interest each year. The bond matures in three years, at which time the principal and interest will be paid. The bank will pay the taxpayer at a 3.5% interest rate each year if he agrees to leave money on deposit for three years. What tax advantage does the Series EE bond offer that is not available with the bank deposit?