Question: I need help understanding how the answer is $838.40 Greshak Corp. plans to issue 33-year, $1,000 par value, 11.50% coupon bonds paid semi-annually in the

I need help understanding how the answer is $838.40 Greshak Corp.

I need help understanding how the answer is $838.40

Greshak Corp. plans to issue 33-year, $1,000 par value, 11.50% coupon bonds paid semi-annually in the near future. If the risk-free rate is 3.5 % and market's current required rate of return on these bonds is 13.75%, how much will Greshak sell each bond for in the bond market? YOU MUST CALCULATE THE EXACT PRICE (IN DOLLARS AND CENTS) AND SHOW ALL WORK (INCLUDING CALCULATOR KEYSTROKES AND VARIABLES USED), MAKE SURE YOU USE AT LEAST 4 DECIMAL PLACES (WHERE APPROPRIATE) IN ALL CALCULATIONS Calc Functions PMT 1000 11.50%-115*.5-57.5 so PMT:57.5 N:33 Shift xP/YR so N:66 IAR 1 1.50% FV:1000 PV:7 PV Answer-$838.40

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Greshak Corp. plans to issue 33-year, $1,000 par value, 11.50% coupon bonds (paid semi-annually) in the near future. If the risk-free rate is 3.50% and market's current required rate of return on...

Greshak Corp. plans to issue 22-year, $1,000 par value, 6.50% coupon bonds (paid semi-annually) in the near future. If the risk-free rate is 3.50% and market's current required rate of return on...

the problems are one to ten The purpose of this assignment is to solidify your understanding on the applications of the risk and return concepts and their role in valuing financial assets. The scores...

ASSIGNMENT #2 The purpose of this assignment is to solidify your understanding on the applications of the risk and return concepts and their role in valuing financial assets. The scores of this...

Case Analysis 1. Compute the yield to maturity of Land'o'Toys' bonds before the purchase announcement and use it to determine the likely current bond rating. (Compare YTM to the table on p. 269)....

Hoyt, Inc. has estimated current year sales (in millions) for the next four quarters. Q1 $240Q2 $250 Q3 $205 Q4 $350 ? Sales for the 1st quarter next year are projected to be $230.? Accounts...

Need help with these discussion postings (in a document) and assignments (all in separate files), all directions are included as well. FINANCE DIRECTIONS Need to provide 1 original post substantial...

1. Calculate the cost of each capital component, after-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method. 2. What do you estimate the company?s WACC? Please...

Please, I need help with the calculations for the following 25 problems in the "final" tab of the workbook before 9pm CST. FINC 340 Quizzes 1 2 Derivatives can be strictly defined as Financial...

Math problems PART I: MULTIPLE CHOICE - Choose the letter of the most correct answer for each question. Record only one answer per question. Each question is worth 2 points, 1. IS THE FOLLOWING...

Find the upper and lower control limits for and R-charts for the width of a chair seat when the sample grand mean (based on 30 samples of six observations each) is 27.0 inches, and the average range...

The emergence of the web, social media, and mobile devices as vehicles for business increased the need for systems integration. How so?

The integrated framework used by management teams and auditors as the benchmark to assess internal control effectiveness was published by

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...