« previous next »

Author Question: Simpson Industries Inc. bonds currently have 12 years remaining to maturity. What is the current ... (Read 36 times)

craiczarry

  • Hero Member
  • *****
  • Posts: 527
on: Jul 11, 2018
Simpson Industries Inc. bonds currently have 12 years remaining to maturity. What is the current price of the firm's semi-annual bonds if they carry a face value of 1,000, an annual coupon rate of 8 and an annual yield to maturity of 7?
 
  A) 924.64
  B) 1,000.00
  C) 1,079.43
  D) 1,080.29

Question 2

A share of preferred stock that pays the same annual dividend forever is an example of a
  perpetuity.
 
  Indicate whether the statement is true or false


bitingbit

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jul 11, 2018
Answer to Question 1

D
Explanation: D) Via Calculator: N = 122, I = 7/2, PMT = 40, FV = 1,000 Solve for PV = 1,080.29.

Answer to Question 2

TRUE


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

Did you know?

The largest baby ever born weighed more than 23 pounds but died just 11 hours after his birth in 1879. The largest surviving baby was born in October 2009 in Sumatra, Indonesia, and weighed an astounding 19.2 pounds at birth.

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
Defying thousands of years of conventional wisdom, scientists are reporting that it is possible for Defying thousands of years of conventional wisdom, scientists are reporting that it is possible for
Vertebral compression Fractures of the spine (vertebra) can cause severe ”band-like” pain that radia Vertebral compression Fractures of the spine (vertebra) can cause severe ”band-like” pain that radia
Model of a sequential study in which two cohorts were followed beginning at age 20. One cohort was f Model of a sequential study in which two cohorts were followed beginning at age 20. One cohort was f
If the pump is not running, check the wiring and current flow before going through the process of ... If the pump is not running, check the wiring and current flow before going through the process of ...
After 159 days,she paid a maturity value of $11,626, which included interest of $814. After 159 days,she paid a maturity value of $11,626, which included interest of $814.
Barry Bonds hits a 125m (450') home run that lands in the stands at an altitude 30m above its ... Barry Bonds hits a 125m (450') home run that lands in the stands at an altitude 30m above its ...
Video: Cellular Respiration & Glucose Mobilization (Glucose transport & Phosphorylation of Glucose)

For a complete list of videos, visit our video library