1. The ERE bond has a 25-year maturity and a $1,000 par value. The interest rate is 10%. The coupon payments are paid semiannually. The bond is selling at the price of $850. What is the bond's (annual) coupon rate?
a. 8.36% b. 7.22% c. 6.27% d. 6.60% e. 6.95%
2. The ERE bond has a 25-year maturity and a $1,000 par value. The interest rate is 10%. The coupon payments are paid semiannually. The bond is selling at the price of $850. What is the bond's (annual) coupon rate?
a. 8.36% b. 7.22% c. 6.27% d. 6.60% e. 6.95%
3. Define and discuss implementation of the following calculations within capital budgeting: IRR, NPV, and Marginal Cost of Capital. When would these be used and what do they tell us?