1.How does a bond issuer decide on the appropriate coupon rate to set on its bond? Explain the difference between the coupon rate and the required return on a bond. A required rate of return is the figure needed to induce investors or companies to invest in something. A coupon rate describes is the amount of interest paid per year expressed as a percentage of the face value of the bond. It is the interest rate that a bond issuer pays to a bondholder. The bond issuer decides on an attractive return rate that would entice investors. 2.A Microgates Industries bond has a 10% coupon rate and a $1,000 face value. Interest is paid semiannually, and the bond has 20 years to maturity. If investors require a 12% yield, what’s the bond’s value? What is the effective annual yield on the bond? Bond Value= $50 x (1-1/1.06^40) /.06+ 1,000/1.06^40

$50 x 15.04630 + 1,000/10.2857
= $849.54
Effective Annual Yeild= 1.06^2-1= 12.36%
3.A Microhard Corp. bond carries an 8% coupon, paid semiannually. The par value is $1,000, and the bond matures in 6 years. If the bond currently sells for $911.37, what is its yield to maturity? What is the effective annual yield? $40 x (1-1/1.06^12)/.06+ 1,000/1.06^12

...1. Which version of Internet Explorer comes with Windows 7?
IE 8
IE 7
IE 9
IE 6
2. What of the following is included with Internet Explorer 8 that enables the browser to display older pages properly?
Compatibility View
IE7 Mode
Down View
Page View
3. Which add-on enables users to send text or other media that you select in an IE browser window to another application, such as an email client, or an Internet resource, such as a blog?
Accelerators
Toolbars and...

.../ (5,200 – 4,600)
ROE = 960 / 600
ROE = 1.6
I believe that with a return on assets of 8% and a return on equity of 1.6, Pharma is on the right track. For every dollar invested, the company is making 60% return which isn’t too bad.
Chapter 7: Exercise/Problems #11 and #12 (pp. 262-263)
11. [Weighted Average Cost of Capital] Kareem Construction Company has the following amounts of interest bearing debt and common equity capital:
Financing Source Dollar Amount...

...the bonds is $1,048.77, what is the yield that Trevor would earn by selling the bonds today? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)
Effective annual yield
%
Question 7
The First Bank of Ellicott City has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of $1.65 on this stock. What is the current price of this preferred stock given a required rate of return...

...FIN 571 Final Exam 1)Which of the following statements is true 2)Book value, or net book value, refers to 3)Assume that the par value of a bond is 1,000. Consider a bond where the coupon rate is 9 and the current yield is 10. Which of the following statements is true 4)If the yield to maturity for a bond is less than the bonds coupon rate, the market value of the bond is __________ 5)For investors, the proper measure of a stocks risk is its __________ 6)A companys beta is -1.5....

...FIN 534 Midterm Exam 1
1. Of the following investments, which would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero.
2. You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increase the calculated value of the investment?
3. Which of the following statements regarding a 20-year monthly payment...

...Fin 350 Exam 2, Fall 2010 Name ___________________________
This has answers to the problems which I believe, but cannot guarantee, are correct.
1. Under certain conditions, a particular project may have more than one IRR. One condition under which this situation can occur is if, in addition to the initial investment at time = 0, a negative cash flow occurs at the end of the project's life.
a. True
b. False
2. The modified IRR (MIRR) method has wide appeal to...

...Lesson Plan in Literature for Grade 7 Students
I. Objectives
Students must be able to do the following at the end of the activities with at least 75% proficiency.
Define poetry.
Enumerate the kinds of poetry.
Interpret a poem.
Explain observation regarding young love in written form.
II. Subject Matter
“Ambahan” Hanunuo-Mangyan Poem
Reference: http://www.mangyan.org/book/export/html/34
Materials: Copy of the pre-assigned text, pictures and...

...
Lesson7 Case Studies
Milan Shrestha
International American University
MGT 500 : Organizational Behavior and Leadership
Sushil Pant
October 21, 2014
Chapter 13
Leading Effective Teams
The given case is about leading team with effectiveness. The case relates to Soda Can Company where I am working as an Executive Director for the company. Soda Can Company is planning to open a new store and I have to put together...

1853 Words |
9 Pages

Share this Document

Let your classmates know about this document and more at StudyMode.com

## Share this Document

Let your classmates know about this document and more at StudyMode.com