Five years ago, GSI an oil services company headquartered in Texas, issued $10 million worth of 12%
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Five years ago, GSI an oil services company headquartered in Texas, issued $10 million worth of 12% 30-year bonds with the dividend payable quarterly. The bonds have a call date of this year if GSI decides to take advantage of it. The interest rate in the marketplace decreased enough that the company is considering calling the bonds since the coupon rate is relatively high. If the company buys the bonds back now for $11 million, determine the rate of return that the company will make
(a) Per quarter
(b) Per year (nominal).
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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a I 100000000124 300000 per quarter By spending 11 million no...View the full answer
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