« previous next »

Author Question: Simpson Industries Inc. bonds currently have 12 years remaining to maturity. What is the current ... (Read 35 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?

The human body produces and destroys 15 million blood cells every second.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

The top 10 most important tips that will help you grow old gracefully include (1) quit smoking, (2) keep your weight down, (3) take supplements, (4) skip a meal each day or fast 1 day per week, (5) get a pet, (6) get medical help for chronic pain, (7) walk regularly, (8) reduce arguments, (9) put live plants in your living space, and (10) do some weight training.

Did you know?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

The Upper Cave at Zhoukoudian yields ages of about 25,000 years for Homo sapiens. The Upper Cave at Zhoukoudian yields ages of about 25,000 years for Homo sapiens.
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
Saffir-Simpson Scale (Hurricane Intensity Scale) Saffir-Simpson Scale (Hurricane Intensity Scale)
Chemical Bonds Chemical Bonds
A box contains red, yellow and green marbles. Half of the marbles are red, 1/8 of the remaining ... A box contains red, yellow and green marbles. Half of the marbles are red, 1/8 of the remaining ...
Earth 200 Million Years Ago Earth 200 Million Years Ago
Video: Stages of Mitosis - Prophase, Prometaphase, Metaphase, Anaphase & Telophase

For a complete list of videos, visit our video library