Best writers. Best papers. Let professionals take care of your academic papers

Order a similar paper and get 15% discount on your first order with us
Use the following coupon "FIRST15"
ORDER NOW

Katie Pairy Fruits Inc. has a $3,500, 14-year bond outstanding with a nominal yield of 16 percent (coupon equals 16% × $3,500 = $560 per year).

/in /by

Katie Pairy Fruits Inc. has a $3,500, 14-year bond outstanding with a nominal yield of 16 percent (coupon equals 16% × $3,500 = $560 per year). Assume that the current market-required interest rate on similar bonds is now only 12 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a.
Compute the current price of the bond. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)

Current price of the bond $

b.
Find the present value of 4 percent × $3,500 (or $140) for 14 years at 12 percent. The $140 is assumed to be an annual payment. Add this value to $3,500. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)

Present value
$

 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"