A local listed company in the construction sector, but internationally known company, has issued bonds (debentures) 3 years ago and is heading for another 20 years of maturity. The face value of each bond was RM10,000 at a coupon rate that is being experienced by the sector at the moment. The opportunity cost is ranging from 7 to 9 per cent. Evaluate the intrinsic value of this bond as of today, using the above input. You may use your own assumption(s) wherever appropriate. Include the discussion on the correlation between pricing and market rate, coupon rate and pricing.

A local listed company in the construction sector, but internationally known company, has issued bonds (debentures) 3 years ago and is heading for another 20 years of maturity. The face value of each bond was RM10,000 at a coupon rate that is being experienced by the sector at the moment. The opportunity cost is ranging from 7 to 9 per cent. Evaluate the intrinsic value of this bond as of today, using the above input. You may use your own assumption(s) wherever appropriate. Include the discussion on the correlation between pricing and market rate, coupon rate and pricing.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You need to determine whether a project is profitable or not in a long run. Based on the data given, which of theseprojects will be profitable according to engineering economy methods?a. θ = 3 yrs., Net Value: 0b. Accumulated (without interest) net values of the revenues, expenses and investments after 5 years is +300.c. Accumulated (without interest) net values of the revenues, expenses and investments after 4 years is +100.d. θ = 6 yrs., Net Value: +400
What impact does the market for intangible property such as stocks and bonds have on the market for real estate? Why would a real estate investor pay attention to what is happening in these markets? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
A stock currently sells for 11 TL per share and pays 0.16 TL per year in dividends. What is an investor's valuation of this stock if she expects it to be selling for 14 TL in one year and requires a 10 % return on equity investments? a. 12,89% b. 12,73% c. 12,87% d. 10%
You are a newly business owner ( around 1year) and you are able to start it up by means of having loan around 5,000,000 then you become lucky because on the next month of your operation you become a winner in a lottery, what will you do with your prize? and why? Pay it to your debts; or Add it to your Capital as your equity
4. A manufacturing company spent $30,000 on a new conveyor. If the conveyor generates cost savings of $4200 per year, the length of time it will take for the company to recover its 8% annual investment at most is: A. Less than 9 years B. 9 to 10 years C. 11 to 12 years D. More than 12 years Please solve based the option max 20 minutes ASAP
You are offered to buy a 4 year coupon corporate bond at the beginning of its 7th month on its third year for $963.94. Its face value is $1000 and its coupon rate is 5.172% p.a. with a coupon paid at the end of each quarter. The government bond rate now is 6.9% Is $963.94 a good price for you to buy it or not? What is the fair price for the bond? What is the yield if buy at the price that you have been offered? If the government bond rate suddenly goes down to 4.7%, what will be the new fair value of the bond?
101 Use the following information to answer the question which immediately follows Y = 2,000, GT-200, Cd=400 +0.9(Y-T) - 600r, 1200-80r, L-0.5Y 500, M-5000, P-7.35, n² = 0.02 What is the value of r? Select one a 0.58 Ob. 0.45 OC 0.62 Od 0.38 13
b) A stock you are evaluating just paid an annual dividend of £2.50. Dividends have grown at a constant rate of 1.5% over the last 15 years and you expect this to continue. i. If the required rate of return on the stock is 12%, what is the fair present value? If the required rate of return on the stock is 15%, what should the fair value be four years from today? ii.
You are working as an investment consultant in a firm. You have been provided data for the past 7 years in the Table 4 as follows: Table 4: Investment Data Yr. Investment (Rs. Millions) Returns (Rs. Millions) 1 185 17 2 128 37 3 75 63 4 98 54 5 155 36 6 63 72 7 112 36 Assume your client plans to investment 30 million rupees. Based on this data will you recommend your client to invest. Why or why not? Your recommendations must be supported by complete workings including model(s), relationships between variables (correlations, coefficient of determinations) and graphical visualizations (such as scatter charts).
If a company predicted rate of inflation goes down (deflation), what happens to the net present value (NPV) of their projects?
The American company produces cars in the territory of Russia. To do this, t imports auto parts produced in the US, for a sum of 20,000 dollars Then workers build cars, the cost of which is 35000 dollars. $5,000 goes to pay indirect taxes, $7,000 for workers' salaries (of which $2,000 is the wages of US citizens working for hire), The remainder of the funds is the company's net profit. Determine how the activity of this company is takeoJoto count in GDP and GNI of Russia and the United States and in the National Income of Russia and the US 1. Russian GDP will increase by 2. Russian GNP will increase by 3. US GDP will increase by 4. US GNP will increase by
A stock now trades for 11 TL per share and distributes 0.16 TL in dividends annually. What is the stock worth to an investor if she anticipates selling it for 14 TL in a year and demands a 10% return on equity investments? a. 12,89%b. 12,73%c. 12,87%d. 10%