Answered: How much will the coupon payments be of…

How much will the coupon payments be of a 20 -year $500 bond with a 10% coupon rate and quarterly payments? A. $12.50 B. $4.17 C. $25.00 D. $50.00

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 2P

See similar textbooks

Related questions

Q: Find the value of the following two corporate bonds then discuss how the value of the bonds change…

A: In financial terminology, a bond is a sort of debt instrument that indicates the bond issuer's…

Q: Amazon would like to get a floating rate loan $10,000,000. It can borrow at 7.92% or Libor + 1%. A…

A: Two unrelated questions appear on the screen. One of them is from the topic of fixed versus floating…

Q: Dagmar has a 4-year car loan at an annual interest rate of 7.5%. She has made 26 payments of…

A: Total number of payment over the entire duration of loan = Number of years×Number of months in a…

Q: An 18-year loan of 21,000 may be repaid under the following two methods: amortization method…

A: A sinking fund refers to a fund that is established to meet future debt obligations. The borrower…

Q: What factors affect current market interest rate? Why does the slope of the yield curve provide an…

A: Interest rate is a function of supply and demand of credit, as the demand increases the interest…

Q: Phoenix Industries has pulled off a miraculous recovery. Four years ago it was near bankruptcy.…

A: Stock Price is determined by computing present value(PV) of all future benefits that will generated…

Q: Calculate Return on Equity (ROE) for 2021 using the Dupont Equation

A: Return on Equity: It represents a profitability measure and indicates the return made by the firm…

Q: Returns earned over a given time period are called realized returns. Historical data on realized…

A: Data given Year (n) Return % (X) 2016 10.00 2017 6.80 2018 12.00 2019 16.80 2020 5.20…

Q: Suppose that you are the CFO of Google with an extra U.S. $20 Million to invest for one year. You…

A: Given : Spot Rate : 1 $ = €0.90 Forward Rate : 1 $ = €0.95 T- Bills Rate = 4% Inflation Rate in…

Q: final answer to 2 decimal places.)

A: for 8 years and 1/2 years= 8*2+1= 17 times. annual interest rate = 4.6%, so semiannual = 4.6/2=…

Q: Everest Inc's preferred stock pays a dividend of $1.25 per quarter, and it sells the preferred stock…

A: The effective annual rate (EAR) is the actual rate of interest that an investment or loan will earn…

Q: A 6-month futures contract on British Pounds is available for a price of $1,3946. The size of each…

A: To hedge the outstanding payable of GBP 125,000, you need to take a short position in the futures…

Q: What is financial planning? What are the methods to be used for financial planning? What is the…

A: Financial planning is the process of managing your financial resources to achieve your life goals.…

Q: jeremy opened a CD (certificate of deposit) on April 3, 2018 with an interest rate of 4.65%…

A: Present value is a financial term that refers to the current value of an amount of money that will…

Q: Interest component of monthly payment: Solomon's student loan balance is now $26,764, with a 7.9%…

A: Interest Compounded Monthly rate means that interest rate which is charge on monthly basis on loan…

Q: machine that is expected to be obsolete in 5 years. The machine is worth P104703. The prevailing…

A: To determine whether the company should buy the machine or not, we need to calculate the present…

Q: Payment of P^(1),000.00 every other month for 2 years that will start after 3 years. Time Diagram…

A: It is a case where payment is done every other month for 2 years. At the same time, this series of…

Q: Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.6%…

A: The required rate of return is the basic rate of return that an individual is looking forward to…

Q: 53. Sam buys an eight-year, 5000 par bond with an annual coupon rate of 5%, paid annually. The bond…

A: To calculate the Macaulay duration just before the first coupon payment, we need to find the present…

Q: The present value of a perpetuity paying 11 at the end of every 4 years is 0.82. Find the annual…

A: The calculation of annual effective rate of interest we will consider the calculation of time period…

Q: You've collected the following information from your favorite financial website. 52-Week Price Lo…

A: Given the following: Dividend, D0 = $2.40 Growth rate for 5 years, gs = 19.5% Growth rate…

Q: Consolidated Industries has a beta of 1.34. Assuming the risk-free rate is 5.75 percent, and the…

A: Given the following: Beta = 1.34 Risk-free rate = 5.75% Return on market = 12.5%

Q: Ceal Corporation has 35.000 shares of common stock outstanding at a price per share of $85. The…

A: WACC refers to the Cost that the company paid to all its stakeholders. It is calculated by taking…

Q: Ewing Corporation is evaluating an extra dividend versus a share repurchase. In either case, $10,000…

A: a) Extra dividend The share price after dividend is Stock Price=Current Stock Price-Amount…

Q: A bond paying a coupon of 7% is redeemable in five years at nominal value ($100) and is currently…

A: Annual coupon payment on bond = Coupon rate×Par value = 0.07×$100 = $7 Required rate of return on…

Q: You are offered an 6 year bond issued by Fordson, at a price of $943.22. The bond has a coupon rate…

A: To determine whether to buy the bond at the offered price, we need to calculate the bond's yield to…

Q: the difference between a premier bond a par bond and a discount bond

A: Bond is a debt obligation of issuer to pay interest periodically and as well as borrowed amount to…

Q: The return on the market portfolio is currently 13%. Bato Gan Corp.Stockholders requires a rate of…

A: The rate of return (r) is 21%. The market rate of return (rm) is 13%. The beta (β) is 3.5.

Q: They are considering trading their car in for a newer used vehicle so that Harry can have dependable…

A: A loan is a contract where a sum of money is forwarded in exchange for a promise of future repayment…

Q: T-bills currently yield 3.7 percent. Stock in Nina Manufacturing is currently selling for $74 per…

Q: Assume that the interest rate is 8.5% per year and you expect to receive the following stream of…

A: Net present value is a capital budgeting techniques help in decision making on the basis of future…

Q: QUESTION 4 You buy a $1000-par 6.5% annual coupon bond for $915 and sell it 4 years later for $940.…

A: HPR stand for Holding period return. It is the difference between in price means purchase price and…

Q: hat is the difference between subidiaries and diversification

A: In finance we often hear about the word subsidiaries. Along with the word subsidiaries we also…

Q: 1. While driving the Coupe, Shaela causes $50,000 of bodily injury and $15,000 of property damage to…

A: Please note under the answering guidelines only up to 3 subparts can be solved. The solution to…

Q: Financial performance measures are essential tools used by managers to evaluate the financial health…

A: Return on Investment (ROI) is a measure of the profitability of an investment. It is calculated by…

Q: Comparing Lottery Payouts A lottery winner is given two options: Option I: Receive a $20 million…

A: There are two options with different streams of cash flows. The better of the two, needs to be found…

Q: Issue No. xxxx of T-Bills is available for sale at a discount of 6.22%. The face value of the bills…

A: Here, Discount Rate is 6.22% Face Value of T-Bill is 75,000,000 Maturity Period is 90 days Note: As…

Q: You currently own 2,000 shares of Industrial Industries stock. You purchase the stock for $128.34…

A: Holding period return on stock is calculated below Holding period return = P1-P0+D1P0 Where, P1 is…

Q: A career counselor decides to make monthly payments of $150 on credit card debt of $3,496.46 and…

A: Given: Monthly payment =$150 Credit card debt = $3,496.46, Monthly Interest rate, r = 1.85%…

Q: Zero-Coupon Bonds (ZCBS) with maturity in 1 and 5 years are available on the market. Their…

A: Forward rates are used by investors, traders, and financial institutions to manage their risks and…

Q: Before recommending a credit line amount to seek from First Bank, determine the following: What…

A: When determining credit line amount to seek from a bank, it is important to consider a variety of…

Q: a $164,000 mortgage for 30 years for a new home is obtained at the rate of 6.5% compounded monthly.…

A: Data given: Mortgage amount=$ 164,000 n=30 years rate=6.5% (compounded monthly) Working Note #1 n=…

Q: USE 4 DECIMAL PLACES Nominal Rate 5% compounded semi annually 5% compounded quarterly 5% compounded…

A: Interest rate is used to calculate the future value and or present value of investments. Though…

Q: A builder is offering $139,371 loans for his properties at 9 percent for 25 years. Monthly payments…

A: It is a problem that requires the identify the difference in the present value of loan repayment at…

Q: Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as…

A: NPV It is a capital budgeting tool to decide on whether the capital project should be accepted or…

Q: What are the three credit reporting agencies?

A: credit reporting agencies provide an important service by collecting and maintaining information on…

Q: Vigour Pharmaceuticals Ltd. is considering investing in a new production line for its pain-reliever…

A: To calculate the terminal cash flow, we need to determine the salvage value of the project at the…

Q: Suppose your client asks for your advice about which portfolio she should invest in. After some…

A: The optimal portfolio refers to the portfolio that maximizes the return for the investor while…

Q: Scream Ice Cream is considering a project that is expected to cost $98900 today; produce annual cash…

A: Cost of capital refers to the minimum rate of return that a company must earn on its investments in…

Q: (Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan…

A: The floating rate was 0.27% over an index based on LIBOR. Maximum annual rate = 2.17% Minimum…

Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

How much will the coupon payments be of a 20 -year

$500

bond with a

10%

coupon rate and quarterly payments?

$12.50

$4.17

$25.00

$50.00

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Concept:

VIEW

Calculation:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%
What is the present value (PV) of an investment that pays $80,000 every year for four years if the interest rate is 6% APR, compounded quarterly? A. $331,614 B. $276,345 C. $359,248 D. 303, 979
What is the initial value of an investment that has a value of $6245.30 after 6 years at a 5.5% annual interest rate with quarterly compounding? $4300 $4400 $4500 $4600
A 9-yearbond pays interest of $28.10 semiannually, has a face value of $1,000, and is selling for $848.90. What are its annual coupon rate and yield to maturity? The annual coupon rate is__________%.
What is the present value of 600 TL which will be invested at the end of each year during the next 12 years? Discount rate is 3%.6.345,96 TL4.632,785.972,4 TL9.623,478.515,2 TL.
If the discount rate is 19%, what is the present value of 3500 USD received at the end of each year for 23 years? a) 12450.5 b) 10000.5 c) 17500 d) 25000 e) 18084.5 ================= What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years, with an annual interest payment of 25%, and the desired return rate of 24%? a) 10250 b) 12327 c) 5427 d) 20000 e) 17500 ================== 12000 USD over the 12% interest deposited in the bank at the end of each year, how many USD will it reach at the end of the 15th year? a) 234356.4 b) 375000 c) 634356.5 d) 447356.4 e) 250225.5
Determine the present value of a financial instrument that pays $18,500 in 10 years if instruments of similar risk pay 6% per year.
step by step explaination What is the future value of $11,000 invested for one year at an interest rate of 6% p.a.? a. $17000 b. $5000 c. $11660 d. $10377
How much willan investment of GH< 20.000 be worth in 10 years at an interest rate of 10%% per annum payable semi-annually? A) GH¢ 54,304.89 B) GH 67,980.98 C) GH¢ 53,065.95 D) GH¢ 69,603.44 E) GH¢ 65,056.59