IBM is selling a $1,000 par value bond that has a coupon rate of 4% that pays

Fantastic news! We've Found the answer you've been seeking!

Question:

IBM is selling a $1,000 par value bond that has a coupon rate of 4% that pays interest annually and has 10 years remaining to maturity. Assuming you require a yield to maturity of 8 percent, what is the value of the bond?

Related Book For answer-question

Principles Of Managerial Finance

ISBN: 978-0136119463

13th Edition

Authors: Lawrence J. Gitman, Chad J. Zutter

See More Books

Posted Date: Mar 20, 2024 02:49 AM

See More Questions

1. Suppose a bond that has semiannual coupons is selling for $10,500. It has 7 years left until maturity. Its par value is $10,000 and its YTM is 7%. What is this bonds annual coupon rate? 2. If the...
1. Calculate the current price of a $1,000 par value bond that has a coupon rate of 16 percent, pays coupon interest annually, has 26 years remaining to maturity, and has a current yield to maturity...
1. The Lone Star Company has $1,000 par value bonds outstanding at 9 percent interest. The bonds will mature in 25 years. Use Appendix B and Appendix D for an approximate answer but calculate your...
Northwest Building Products (NBP) manufactures two lumber products from a joint milling process: residential building lumber (RBL) and commercial building lumber (CBL). A standard production run...
How are the concepts of coupling and software portability related? Provide examples to support your discussion.
Anvils Works requires, on average, 2800 tons of aluminum each week, with a standard deviation of 1000 tons. The lead time to receive its orders is 10 weeks. The holding cost for one ton of aluminum...
In the 1970s, Special Electric Company brokered the sale of crocidolite asbestos, which is the most toxic form of asbestos, to Johns- Manville Corporation. Special Electric never held possession of...
The yearly demand for a seasonal, profitable item follows the distribution below: Demand (units) Probability 1,000 ........ .20 2,000 ........ .30 3,000 ........ .40 4,000 ........ .10 A manufacturer...
1. Explain why all of the following values are equal. What is the value shown in each line below? 9-2 9-x-y 1 dzdydx 9-x2-y2 /9-y2 9-y2-22 2 1 dxdzdy 9-y2 8 3 9-x c9-xz 70 1 dydzdx
The following shows the change in sales, cost and net profit estimates after a company launches a marketing campaign for two products within its brand which are expected to increase sales for each...
Use your calculator to evaluate and round the answer to 2 decimal places. 0.03 650 1+ 3.4 0.03 3.4
Find the energy usage for traveling a distance of 1 km by an ICE car and a battery electric vehicle considering well - to - wheel energy efficiency. a . Consider that petrol for ICE cars has a...
Imagine that you are the financial advisor for a family of five, consisting of a father, a mother, and three young children (ages six, eight, and twelve). Currently, only the mother, Carol, is...
Hayes Jewelers is a jewelry wholesaler. Lowell was employed by Hayes as a traveling sales representative. He drove his own vehicle to meet clients and attend trade shows. His practice was to keep the...
If you pay $ 2 0 0 0 at the beginning of each year for 1 0 years for your insurance scheme which earns 1 2 % compounded annually, what is the present value of your insurance scheme?
One mole of solid Cr 2 O 3 at 2500 K is dissolved in a large volume of a liquid Raoultian solution of Al 2 O 3 and Cr 2 O 3 in which X Cr2O3 = 0.2 and which is also at 2500 K. Calculate the changes...
A summary of changes in Pen Corporation's Investment in Sam account from January 1, 2011, to December 31, 2013, follows (in thousands): ADDITIONAL INFORMATION 1. Pen acquired its 80 percent interest...
Dynabase Tool has forecast its total funds requirements for the coming year as shown in the following table. a. Divide the firm's monthly funds requirement into (1) A permanent component and (2) A...
Micro-Pub, Inc., is considering the purchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and each requires an initial investment of $4,000....
Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following...
Graph the levels of real GDP for the United States, Canada, and Germany (data can be found at www.oecd.org under Statistics and then under National Accounts). Are U.S. and Canadian business cycles...
An economic variable is persistent if declines in the variable tend to be followed by more declines, and increases by more increases. This question asks you to study the persistence of the civilian...
In a particular economy the real money demand function is \[ \frac{M^{d}}{P}=3000+0.1 Y-10,000 i \] Assume that $M=6000, P=2.0$, and $\pi^{e}=0.02$. a. What is the real interest rate, $r$, that...

IBM is selling a $1,000 par value bond that has a coupon rate of 4% that pays

Question:

Expert Answer:

Absolutely we can calculate the value of the bond using the yield to maturity YTM formula Heres what ... View the full answer

Principles Of Managerial Finance

Students also viewed these finance questions