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 128 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?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

There are immediate benefits of chiropractic adjustments that are visible via magnetic resonance imaging (MRI). It shows that spinal manipulation therapy is effective in decreasing pain and increasing the gaps between the vertebrae, reducing pressure that leads to pain.

Did you know?

In 1885, the Lloyd Manufacturing Company of Albany, New York, promoted and sold "Cocaine Toothache Drops" at 15 cents per bottle! In 1914, the Harrison Narcotic Act brought the sale and distribution of this drug under federal control.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

By definition, when a medication is administered intravenously, its bioavailability is 100%.

During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t
Ben Jones, Black Face and Arm Unit. Ben Jones, Black Face and Arm Unit.
During my research in India, I interviewed this 8-year-old girl. Mahashury is a bonded laborer who ... During my research in India, I interviewed this 8-year-old girl. Mahashury is a bonded laborer who ...
Cutaneous granulomatous lesions on the face of a man suffering from a dermatophytic infection. Cutaneous granulomatous lesions on the face of a man suffering from a dermatophytic infection.
Ionic Bonds: Cations vs. Anions Ionic Bonds: Cations vs. Anions
A government of Ontario 364-day T-bills with a face value of $50 000 were purchased on January ... A government of Ontario 364-day T-bills with a face value of $50 000 were purchased on January ...
Video: Oxygen transport - methods and oxyhemoglobin

For a complete list of videos, visit our video library