Marty Corp is issuing a perpetual bond today that will pay $100 per year starting in 3 years. If the cost of capital is 5%, what is the value of this bond today? Choose the closest. a) $2,000 b) $2,124 c) $1,997 d) $1,814
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Marty Corp is issuing a perpetual bond today that will pay $100 per year starting in 3 years. If the cost of capital is 5%, what is the
a) $2,000
b) $2,124
c) $1,997
d) $1,814
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- What would you pay for a $180,000 debenture bond that matures in 15 years and pays $9,000 a year in interest if you wanted to earn a yield of: Click here to view factor tables. (a) 2%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Amount to PayThe following information applies to this question: Johnson Corporation plans to obtain financing with a $1,000,000 bond issue that has a term of 10 years. Payments wilI be made semi-annually. if the bond (payment) rate is stated at 7%, and the bonds call for semi-annual payments, what is the amount of those payments? O a. $350,000 O b. $70,000 OC. $35,000 d. $700,000Compute the specified quantity.A 4-year bond costs $20,000 and will pay a total of $2,800 in interest over its lifetime. What is its annual interest rate r? (Round your answer to three decimal places.)r = ___%
- What would you pay for a $110,000 debenture bond that matures in 15 years and pays $5,500 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 0 decimal places, e.g. 458,581.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 bought a $1,000 face value Suffolk County, NY 10-year bond with equal annual amortization. A) How much principal will you receive each year? B) If the coupon rate is 4.3%/year, how much interest will you receive in year 1 and year 2?
- Suppose Huron Corp. must make a $50 million pension payment every year for the next 5 years. Huron decides to immunize the payment with investments in 2 year and 5 year zeros. The interest rate is 4%. If each bond in the market has a face value of S10,000, how many 5 year bonds will they purchase? A) Approximately 8900 B) Approximately 1200 C) Approximately 8395 D) Approximately 6727What would you pay for a $205,000 debenture bond that matures in 15 years and pays $10,250 a year in interest if you wanted to earn a yield of 3%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)Chuck's of Czechia is selling a perpetual bong that will provide the bondholder with a $50 / year forever. The first payment to the bondholder is later this afternoon and then the following payment is one year from now. Assuming an interest rate of 6%, what is the value of this bond? Choose the closest. a) $666.67 b) $833.33 c) $333.33 d) $883.33
- a. Assuming you purchased the bond for $350 what rate of return would you earn if you held the bond for 25 years until it matured with a value $1000? a. Rate of return____% b. Suppose under the terms of thebond you could redeem the bond in 2024. DMF agreed to pay an annual interest rate of 1.4 percent until the date. How much would the bond be worth at that time? b. Bond value_____ c. In 2024 instead of cashing in the bond for its then current value you decide to hold the bond until it mature in 2043. What annual rate of return will you earn over the last 19 years? c. Rate of return___%BroadStreet Bank has just been given a $10,000,000, 5 year CD deposit by the local municipality. The bank has agreed to pay 8%, compounded annually on this deposit. The bank wishes to choose one debt investment to cover this deposit, so that they have earnings from this investment to just cover the interest and CD principal when it comes due in 5 years. They are looking at the following 3 possibilities for investment: Bond Maturity Coupon YTM Duration1 5 0.00% 8.00% 5.002 6 7.90% 8.00% 5.003 7 17.15% 8.00% 5.00 • Show that each of three investment will cover the future payout required by the CD, even if market rates increase or drop by ½ % by the end of 5 yearsIf company A wants to raise 20-24million through bonds, and company B wants to invest in company A. In the conditions company A currently pays semi-annual interest of $100, as the bonds age for 30 years and the value is $2000per bond and interest is 16%. 1) What cash flow would need to be expected for company B to purchase the bond in the fifth and the final payment. 2)If the value of the bond was equal to $2400 should company B invest in the bond of company A. Provide all calculations and formulas used for pricing.