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Coca-Cola has a zero-coupon bond that will pay $1,000 at maturity in five years. Today the bond is selling for $790.09. What is the YTM?
What are the total return, the current yield, and the capital gains yield for the discount bond? Assume that it is held to maturity and company doesn't default
What required rate of return for this stock would result in a price per share of $28?
What would be your return on investment if you bought when rates were 11% and sold when rates were 8%?
Regarding the short-term trading opportunity a) What basic trading principle is involved in this situation?
What is the portfolio value under the base scenario above (expressed in dollars and cents)?
You want to determine both the yield to maturity and the yield to call for this bond.
Calculate the following for this bond. a) The purchase price of the bond b) The current price of the bond
An insurance company is offering a new policy to its customers. Typically the policy is bought by a parent or grandparent for a child at the child's birth.
What is the current yield on the bonds? The YTM? The effective annual yield?
Assume that the YTM remains constant for the next three years. What will be the price of the bond three years from today?
What is the company's weighted average cost of capital (WACC)? What is the company's after-tax cost of debt?
What will be the initial dilution in earnings per share if the new stock is issued?
Compute the price of the bonds based on semiannual analysis.
The bond pays interest semi-annually, has a yield-to-maturity of 7.47 percent, and matures in 12 years. What is the current yield?
A $1000 face value bond has a remaining maturity of 10 years and a required return of 9%. The bonds rate is 7.4%. What is the fair value.
Determine how much of the bond discount would have been amortized prior to calling the bonds; and then calculate the gain or loss on retirement.
Davison Carecenters Inc. provides financing and capital to the health-care industry, with a particular focus on nursing homes for the elderly.
Calculate the current price of the bond if the yield to maturity is 9%. (work this problem using Excel spread sheet also)
How low does the borrowing cost need to drop to justify refunding with a new issue?
Principles from the text problem sets for bond valuation, stock valuation, required return for a preferred stock and CAPM apply to health care finance.
Why does the longer term (15 year) bond fluctuate more when interest rates change than does the shorter term bond (1 year)?
If the 7% coupon bond with time to maturity of 20 years is selling for $901.82, what is the yield to maturity of the bond?
What is the maturity risk premium on 30-year Treasury bonds? Assume the expected inflation for 3-month T-Bills and 30-year T-Bonds are the same.
Prepare entries in journal form (Excel) to record the bond transactions. (Round amounts to the nearest dollar.)