This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Flyover Airlines Inc issued 20-year, 8 per annum semi-annual coupon bonds at their face value of ... (Read 164 times)

c0205847

  • Hero Member
  • *****
  • Posts: 531
on: Jul 11, 2018
Flyover Airlines Inc issued 20-year, 8 per annum semi-annual coupon bonds at their face value of 1,000. Immediately after issue a major disaster befell the airline and the yield to maturity on their bonds rose to 15. per annum.
 
  What is the new price of the firm's bonds?
  A) 559.20
  B) 613.22
  C) 1,000
  D) 1324.18

Question 2

The present value of a 100 perpetuity discounted at 5 is 5,000.
 
  Indicate whether the statement is true or false


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

popopong

  • Sr. Member
  • ****
  • Posts: 307
Reply #1 on: Jul 11, 2018
Answer to Question 1

A
Explanation: A) Via Calculator: N = 202, I = 15/2, PMT = 40, FV = 1,000 Solve for PV = 559.20.

Answer to Question 2

FALSE


c0205847

  • Hero Member
  • *****
  • Posts: 531
Reply #2 on: Jul 11, 2018
Thank you :)


popopong

  • Sr. Member
  • ****
  • Posts: 307
Reply #3 on: Jul 11, 2018
Happy to help you


« previous next »
 

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

Did you know?

Your heart beats over 36 million times a year.

Did you know?

Pubic lice (crabs) are usually spread through sexual contact. You cannot catch them by using a public toilet.

Did you know?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Nonpolar and polar bonds in an organic molecule Nonpolar and polar bonds in an organic molecule
Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th
On May 15, 1916, after deliberating for one hour, an all-white jury in Waco, Texas, found seventeen- On May 15, 1916, after deliberating for one hour, an all-white jury in Waco, Texas, found seventeen-
Homeschooling has come a long way. These children are performing in a musical at the annual ... Homeschooling has come a long way. These children are performing in a musical at the annual ...
A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ... A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ...
Life Table for an Annual Plant Cohort Life Table for an Annual Plant Cohort
Video: Cardiac conductile cells

For a complete list of videos, visit our video library