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S_A_V [24]
3 years ago
11

Item 4 A coupon bond that pays interest annually has a par value of $1,000, matures in seven years, and has a yield to maturity

of 9.3%. The intrinsic value of the bond today will be ______ if the coupon rate is 8.5%.
Business
1 answer:
maria [59]3 years ago
7 0

Answer:

$960.138

Explanation:

Calculation to determine what The intrinsic value of the bond today will be if the coupon rate is 8.5%.

Using financial calculator to determine intrinsic value of the bond today

FV = $1000

PMT =8.5%*$1,000=$85

n = 7 years

i = 9.3%

PV=?

Hence,

PV = $960.138.

Therefore The intrinsic value of the bond today will be $960.138 if the coupon rate is 8.5%.

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Explanation:

Terminal Value = Free Cash Flow (FCF) of last forecast *(1+ perpetual growth rate)/(discount rate – perpetual growth rate)

FCF of last forecast = $88*(1+10%)^2 = $106.48

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3 years ago
Inez has a specific set of plans to build a sailboat. the plans are detailed in nature, and any boat builder can build the boat.
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3 years ago
"A customer owns 1,000 shares of XYZZ stock, purchased at $40 per share. The stock is now at $45, and the customer has become ex
Alika [10]

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In this scenario the customer owns 1,000 shares of stock XYZZ stock that have been in a bullish trend rising from $40 to $45.

Usually a bullish trend is followed by a bearish trend.

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On sale of the 1,000 shares the customer will make $5 per share, and enter a put option since the market is going bearish.

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According to the given question, the McDonald's is start promoting and also offer the various types of products and examining the success this is known as the test marketing evaluation process.

 Therefore, Test marketing is the correct answer.

   

8 0
3 years ago
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