A stream of cash flows that pays $2,000 at the end of year 1 and $4,000 at the end of year 2. If the cash flows are discounted at 8% annually. Determine the total present value of this payment stream.

At the end of June 20x0 a UK corporate bond has an annual coupon rate of 1.5%, par (face) value of £1,000 and will mature in June 20x6. Similar UK government bonds have an annual interest rate of 2%. Assuming annual coupons, calculate the value of the corporate bond.

Answer rating: 100% (QA)

1 Present Value of Cash Flows Cash Flow at Year 1 2000 Cash Flow at Year 2 4000 Discount Rate r 8 To ... View the full answer