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Define bond duration. Define immunization in the finance-investment context, and relate how duration is useful in immunization.
The bonds have a par value of $1,000, a current price of $1,125, and they will mature in 13 years. What is the yield to maturity on these bonds?
When trying to decide what price to pay for a PRIVATE FIRM, what role does the book values of the PRIVATE FIRM play in its evaluation.
a) You decide to hedge your price exposure. What is your optimal strategy? Explain. b) What are the payoffs of hedging?
Problem: Which of the following statements is the most correct and why? 1) If bond sells for less than par, then its yield to maturity is less than coupon rate
Suppose a five year, $1000 bond with annual coupon has a price of $900 and yield to maturity of 6%. What is the bond's coupon rate?
Boone Company issued $240,000 of 8%, 20-year bonds on January 1, 2007, at face value. Interest is payable annually on January 1.
What is the price per $100 face value of a two-year, zero-coupon, risk-free bond?
Should the government be involved in enforcing ethical practices for private companies?
Sinking fund cash would be classified on the balance sheet at:
Why does the longer-term bond's price (Bond L) vary more than the price of the shorter-term bond (Bond S) when market interest rates change?
What is the yield to maturity (based on the current market price)? What is the yield to call?
On the issue date, the market rate of interest is 6%. Compute the price of the bonds on their issue date.
A Consol (perpetual) bond pays $250 every 6 months. If the interest rate is 14 percent, what is this bond's selling price?
Briefly explain the business meaning of YTM, assuming that you are providing an investment seminar to an audience with little or no financial background.
Explain the three principal forms of business organization. Outline their respective advantages and disadvantages.
a. What is Suncoast's current debt ratio? b. What would the new debt ratio be if the machine were leased? If it is purchased?
The bond has a face value of $1,000. What is the change in the price of this bond if the market yield rises to 6% from the current yield of 4.5%?
A $1,000 face value bond has a remaining maturity of 10 years and a required return of 9%. The bond's coupon rate is 7.4%. What is the fair value of this bond?
Consider the Leverage Unlimited, Inc., zero coupon bonds of 2008. The bonds were issued in 1990 for $100. Determine the yield to maturity
If interest rates rise after a bond is issued, the yield to maturity will exceed the current yield.
During 2011, coupons worth $30,000 were issued, and merchandise worth $8000 was distributed in exchange for coupons redeemed.
Explain why a foreign investment project might have a lower required return than an otherwise-identical domestic project.
Determine the selling price of these bonds $ ___________ and provide the journal entry to record the sale of the bonds on January 1, 2008.
How much free cash flow did the firm generate during the just-completed year?