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 102 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?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

More than 150,000 Americans killed by cardiovascular disease are younger than the age of 65 years.

Did you know?

There are 60,000 miles of blood vessels in every adult human.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

Certain chemicals, after ingestion, can be converted by the body into cyanide. Most of these chemicals have been removed from the market, but some old nail polish remover, solvents, and plastics manufacturing solutions can contain these substances.

The iron atom of heme has six coordination bonds: four in the plane The iron atom of heme has six coordination bonds: four in the plane
A 5,000-year-old Egyptian garment A 5,000-year-old Egyptian garment
This mural depicts the history of Mexico and its struggles to create a just society in the face of ... This mural depicts the history of Mexico and its struggles to create a just society in the face of ...
The remarkably complete skull of a 3-year-old Australopithecus girl; the fossil is 3.3 million ... The remarkably complete skull of a 3-year-old Australopithecus girl; the fossil is 3.3 million ...
Types of ecosystem service vs. total global value per year Types of ecosystem service vs. total global value per year
Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ... Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ...
Video: Transferring genes into plants Animation

For a complete list of videos, visit our video library