subject
Business, 02.04.2020 04:15 kawaunmartinjr10

Midland Utilities has outstanding a bond issue that will mature to its $1,000 par value in 11 years. The bond has a coupon interest rate of 13% and pays interest annually

a. Find the value of the bond if the required return is (1)13%, (2)17%, and (3) 10%.

b. Use your finding in part a to discuss the relationship between the coupon interest rate on a bond and the required return and the market value of the bond relative to its par value.

c. What two possible reasons could cause the required return to differ from the coupon interestrate?

ansver
Answers: 2

Another question on Business

question
Business, 21.06.2019 16:50
The bonds issued by the south foot bear a coupon rate of 7.5 percent, payable semiannually. the bonds mature in 6.5 years, sell at par, and have a $1,000 face value. what is the yield to maturity
Answers: 3
question
Business, 21.06.2019 20:30
Which of the following best describes the purpose of raising and lowering the required reserve ratio? a. to make sure that government spending does not result in either a surplus or deficit. b. to stimulate economic growth by making it less expensive for producers to get loans. c. to manage the economy by increasing or decreasing the amount of loans being made. d. to regulate the activity of private banks to assure an equitable distribution of wealth. 2b2t
Answers: 3
question
Business, 22.06.2019 02:00
What is an example of a good stock to buy in a recession? a) cyclical stock b) defensive stock c) income stock d) bond
Answers: 1
question
Business, 22.06.2019 19:10
Calculating and interpreting eps information wells fargo reports the following information in its 2015 form 10-k. in millions 2015 2014 wells fargo net income $24,005 $24,168 preferred stock dividends $1,535 $1,347 common stock dividends $7,400 $6,908 average common shares outstanding 5,136.5 5,237.2 diluted average common shares outstanding 5,209.8 5,324.4 determine wells fargo's basic eps for fiscal 2015 and for fiscal 2014. round answers to two decimal places.
Answers: 3
You know the right answer?
Midland Utilities has outstanding a bond issue that will mature to its $1,000 par value in 11 years....
Questions
question
Mathematics, 20.09.2020 02:01
Questions on the website: 13722359