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Author Question: Once the weighted average cost of capital (WACC) is determined, then all projects of average risk ... (Read 145 times)

james

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on: Jul 10, 2018
Once the weighted average cost of capital (WACC) is determined, then all projects of average risk
  will be compared to the original WACC regardless of the size of the capital budget.
 
  Indicate whether the statement is true or false

Question 2

Graystone bonds have a maturity value of 1,000. The bonds carry a coupon rate of 12 percent. Interest is paid
  semiannually. The bonds will mature in nine years. If the current market price is 976.50,
 
  a. what is the yield to maturity on the bond?
  b. what is the current yield on the bond?


sarah_brady415

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Reply #1 on: Jul 10, 2018
Answer to Question 1

FALSE

Answer to Question 2

a. Yield to maturity = 12.44
b. Current yield = 120/976.50 = 12.29


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