Tom cruise lines inc. issued bonds five years ago at $1,000 per bond. these bonds had a 25-year life when issued and the annual interest payment was then 15 percent. this return was in line with the required returns by bondholders at that point as described below: real rate of return 5 % inflation premium 5 risk premium 5 total return 15 % assume that five years later the inflation premium is only 3 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds. the bonds have 20 years remaining until maturity. compute the new price of the bond. use appendix b and appendix d for an approximate answer but calculate your final answer using the formula and financial calculator method
Answers: 2
Other questions on the subject: Business
Business, 21.06.2019 15:30, gwoodbyrne
Thirty years ago daniel bought a plot of land for $50,000 when the cpi was 50. now the cpi is 180 and he sold the land for $180,000. what issue might inflation cause for daniel?
Answers: 2
Business, 22.06.2019 13:30, karenjunior
Over the past year, three of the star salesmen at family resorts international's corporate office have been lured away to competitors. on top of that, karina, the general manager of the sales department, has noticed that most employees come in, do their jobs, and leave. family resorts offers a good salary, benefits, and tuition reimbursement, as well as a number of development and training programs. most employees seem contented enough, but karina would like to do something to increase the level of engagement among her staff. what do you think karina should do?
Answers: 1
Business, 23.06.2019 02:00, kittybatch345
What percentage of hard rock's profit is derived from retail shop sales?
Answers: 1
You know the right answer?
Tom cruise lines inc. issued bonds five years ago at $1,000 per bond. these bonds had a 25-year life...
Questions in other subjects:
