« previous next »

Author Question: Simpson Industries Inc. bonds currently have 12 years remaining to maturity. What is the current ... (Read 65 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 lipid bilayer is made of phospholipids. They are arranged in a double layer because one of their ends is attracted to water while the other is repelled by water.

Did you know?

Carbamazepine can interfere with the results of home pregnancy tests. If you are taking carbamazepine, do not try to test for pregnancy at home.

Did you know?

Amoebae are the simplest type of protozoans, and are characterized by a feeding and dividing trophozoite stage that moves by temporary extensions called pseudopodia or false feet.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

The Long Valley Caldera Erupted the Bishop Ash 760,000 Years Ago The Long Valley Caldera Erupted the Bishop Ash 760,000 Years Ago
Results from sequential study of two cohorts tested at three ages and at three different points in t Results from sequential study of two cohorts tested at three ages and at three different points in t
The Last 10,000 Years of Greenhouse Gas Concentrations The Last 10,000 Years of Greenhouse Gas Concentrations
During their elderly years, men and women continue to exhibit aspects of the gender roles that they ... During their elderly years, men and women continue to exhibit aspects of the gender roles that they ...
Change in Bone Mass over Time In your early years, more bone mass is added than lost in your body Change in Bone Mass over Time In your early years, more bone mass is added than lost in your body
Nine $10 000, 4% bonds with interest payable semi-annually and redeemable at par are purchased ... Nine $10 000, 4% bonds with interest payable semi-annually and redeemable at par are purchased ...
Video: Acids and bases - definition

For a complete list of videos, visit our video library