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 134 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?

Women are two-thirds more likely than men to develop irritable bowel syndrome. This may be attributable to hormonal changes related to their menstrual cycles.

Did you know?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

Signs and symptoms of a drug overdose include losing consciousness, fever or sweating, breathing problems, abnormal pulse, and changes in skin color.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Children with Down syndrome have a small head, short, thick neck, flattened face, and a distinctive ... Children with Down syndrome have a small head, short, thick neck, flattened face, and a distinctive ...
The location of the fusiform face area and the MT area: Damage to the fusiform face area is ... The location of the fusiform face area and the MT area: Damage to the fusiform face area is ...
A) Butterfly-shaped lupus rash. Lupus is the Latin word for wolf; the face rash was thought to look ... A) Butterfly-shaped lupus rash. Lupus is the Latin word for wolf; the face rash was thought to look ...
Hydrogen Bonds رابطة هيدروجينية Hydrogen Bonds رابطة هيدروجينية
Use a graphical method to find the length of the loan to the nearest year Use a graphical method to find the length of the loan to the nearest year
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, ...
Video: Osteoporosis

For a complete list of videos, visit our video library