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
A
Explanation: A) Via Calculator: N = 20*2, I = 15/2, PMT = 40, FV = 1,000 Solve for PV = $559.20.
You might also like to view...
Under the ____________________, the write-off of an account as uncollectible does not affect either the income statement or the balance sheet
Fill in the blank(s) with correct word
A parent brand that is associated with multiple products through brand extensions is also called a(n)________
A) category brand B) subbrand C) extension brand D) family brand E) line brand
In the context of a global supply chain, which of the following players does the operations management function bring together?
a. the individual firm and its global suppliers b. potential consumers of the firm’s products and local retailers c. sources of finance (e.g., banks) and consumers of capital d. equipment manufacturers and suppliers of equipment parts
How does a "no-arrival, no-sale" contract differ from an F.O.B. destination contract?
A) Identification will occur in an F.O.B. destination contract, but not in a no-arrival, no-sale contract. B) If the goods fail to reach their destination, the seller must replace them in an F.O.B. destination contract, but not in a no-arrival, no-sale contract. C) Risk of loss while the goods are in transit is on the seller in an F.O.B. destination contract but on the buyer on a no-arrival, no-sale contract. D) Implied warranties exist in the F.O.B. destination contract, but not in the no-arrival, no-sale contract.