A Province of Manitoba $250,000 face value bond carrying a 2% coupon was issued on December 1, 2006, with 30 years until maturity. On January 10, 2010, when market yields were 4.19%, what is the premium or discount? $80,000 premium $87,826 premium $80,000 discount $87,826 discount

A Province of Manitoba $250,000 face value bond carrying a 2% coupon was issued on December 1, 2006, with 30 years until maturity. On January 10, 2010, when market yields were 4.19%, what is the premium or discount? $80,000 premium $87,826 premium $80,000 discount $87,826 discount

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EB: Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual...

See similar textbooks

Related questions

Q: Energy efficiency of an equipment can be improved by 20% through enhanced maintenance leading to a…

A: Maximum allowable investment is the present value of fuel saving The maximum allowable investment…

Q: Q7-5. Can an ordinary annuity table be used to determine the present value of a three-year…

A: Answer:- No EXPLANATION:- The cash flow given above is uneven. the present value of an uneven cash…

Q: For the UK public investment in flood defences is easier than investing in reducing greenhouse gas…

A: The state's investment in specific assets, whether through central or local governments, publicly…

Q: Evaluate the various risk financing mechanisms available to businesses.

A: Risk financing is a set of policies aimed at shifting fund mobilization away from unorganized…

Q: Given all else equal, if the yield to maturity of a Treasury bond decreases substantially, generally…

A: Yield to maturity the rate of return that bond hider will get if they hold such bond till maturity…

Q: The Gilbert Instrument Corporation is considering replacing the wood steamer it currently uses to…

A: Here, Cost of capital =14% To Find: NPV of the project =?

Q: 20. Which of the following statement is CORRECT? Assume that the project being considered has normal…

A: The question pertains to the capital budgeting tool of IRR. IRR is the internal rate of return. It…

Q: A borrower and lender agree on a negative-amortizing loan in the amount of $300,000 at 4% interest…

A: Given, The loan amount is $300,000 Rate of interest is 4% Term of loan is 30 years Amount at…

Q: he Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $55,000. It had…

A: Machine purchased 5 years ago = $55,000 Expected life = 10 years Depreciation on machine = $5,500…

Q: What is the incremental profit? To get a rough project's profitability, what is the project's…

A: Profit represents the economic benefit realized when income from a business activity exceeds the…

Q: $3000 are invested in a bank account at an interest rate of 5 percent per year. Find the amount in…

A: As per the answering guidelines we are allowed to solve the first three parts of a question. The…

Q: Suppose that all possible types of perpetuities (differentiated in payment starting periods and…

A: A perpetual annuity is a policy that you pay indefinitely. In finance, eternity is a constant flow…

Q: A corporation decides to deposit fixed payment per account earning 9% interest per year in order to…

A: Compound interest is the interest that is charged on the principal amount as well as interest…

Q: How does the following contributed to capital market a) Information disclosure b)Liberalisation…

A: A financial market seems to be a place where consumers trade financial securities including bonds,…

Q: IDENTIFICATION: What area of insurance companies is faced with the risk that estimates of loss…

A: Insurance risk management is referred as an assessment as well as quantification of the financial…

Q: How much debt does the company now have, to the nearest thousand dollars? How much equity? What is…

A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…

Q: Rey borrowed F 40,000 at 12 % compounded semiannually. He agreed to pay the der semiannually a sum…

A: The loans are paid by the periodic payments that carry the payment for the principal amount and…

Q: The firm's bank charges $18 per wire and $0.50 per EDT. The EDT takes one day longer to clear. The…

A: Since Minimum Transfer Balance (TBAL)=Incremental costNo. of days saved×(Investment Opportunity…

Q: Suppose Capital One is advertising a 60-month, 5.14% APR motorcycle loan. If you need to borrow…

A: The monthly payment can be calculated with the help of present value of annuity function.

Q: Q3. Ricardo plans to own a 1 hectare lot after 10 years for an estimated cost of P5M. To accumulate…

A: Accumulated amount needed initially (X) = P 5000000 r = 15% n = 10 years Let A = Annual deposits…

Q: Suppose that a random sample of twenty recently sold houses in a certain city has a mean sales price…

A: The basic assumption that sales are normally distributed are bell shaped symmetrical on both sides…

Q: What is the project's NPV?

A: Net Present Value: It represents the measure of the profitability of a project or investment in…

Q: Q. It is July 16. A company has a portfolio of stocks worth $100 million. The beta of the portfolio…

A: Investors hold "long" security positions in the hope that the stock's value will grow in the future.…

Q: a.If the interest rate is 10%, what is the present value of a security that pays you K1,100 next…

A: Since you have posted multiple questions, we shall be solving the first one for you. In case you…

Q: You are required to: 1. Compute the cost of equity for this project 2. Compute the relevant cost of…

A: Weighted average cost of capital (WACC) refers to the combined cost of company's capital from all…

Q: Suppose you buy a one-year forward contract at $65. At expiration, the spot price is $73. The…

A: Value of the contract at expiration = Spot price - Futures price * e-(risk free rate * Time to…

Q: dient series cash flow having ₱3000 on year 3, ₱4000 on year 4, ₱5000 on year 5 and ₱6000 on…

A: Present value is the discounted value of future cashflows.

Q: What is the covariance of returns between stocks A and B? Year Retum A Retum B 2017 60% 35% 2016 20%…

A: Here, To Find: Covariance =?

Q: You own a stock worth $100. A put has a strike price of $90 and a premium of $8. A Call has as…

A: Collar strategy is created by holding an underlying stock, buying an out of the money put option,…

Q: ABC Company acquired all of XYZ Corporation's assets and liabilities on June 30, 20X1. XYZ reported…

A: Book value and fair value Book value is based on the original old purchase price where annual…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: Answer 1:- The initial cash flow of the project includes the initial capital expenditure and the net…

Q: Assume that a bond will make payments every six months as shown on the following timeline (using…

A: Total number of payments are 40 Coupon payment is $19.89 To calculate : Time to maturity in year…

Q: McDonald's offers numerous perks and benefits for its employees which makes the staff happy and…

A: To summarise, benefits are intended to supplement a person's wage, whereas a perk is more of a…

Q: In terms of Porfolio Variance calculation/formula of 0.02819 your computation is different than mine…

A: As per the given information in the question, we need to consider the standard deviation and weights…

Q: 10. A firm bought an equipment for ₱56,000. Other expenses including the installation amounted to…

A: In order to calculate the book value at the end of a prescribed period using sinking fund method, we…

Q: various time related aspects of consequential losses.

A: Damage to business property or equipment causes a consequential loss, which is an indirect negative…

Q: A quoted rate of interest is a “nominal” rate because it includes inflation expectations. a) True…

A: Answer:- True. The nominal interest rate comprises of the real interest rate and a premium for…

Q: 3. Consider assets A and B with expected returns of E(RA)=12% and E(RB)=20% and standard deviations…

A: Expected return of A=E(Ra) = 12% Expected return of B = E(Rb) = 20% Standard deviation of A = SDa =…

Q: You are considering two ways of financing a spring break vacation. You could put it on your credit…

A: The modified rate of return for compounding interest into actual terms of time is called the…

Q: Ozzy Osbourne plans to open a regional competitor to Amtrak and he took out a small loan to get…

A: We can use the concept of time value of money here. The concept of time value of money states that…

Q: Assume you graduate from college with $30,000 in student loans. If your interest rate is fixed at…

A: The monthly payment amount can be calculated with the help of present value of annuity function

Q: Project A costs $41,425 and has a WACC of 13%. Its expected net cash as follows: Year: 0 1 2 3 4 CF:…

A: IRR is internal rate of return at net present value is zero that means present value of cash flow is…

Q: X, Y and Z. Alternative X requires a cost of ₱50,000 yet guarantees a return of ₱35,000 per year for…

A: Project can be selected based on Net Present Value with highest Value Net present Value is the…

Q: Whited Inc.'s stock currently sells for $35.25 per share. The dividend is projected to increase at a…

A: Given, The current price of stock is $35.25 per share Growth rate is 5.50% Required return on stock…

Q: Why digital payment has changed the fiance systems?

A: In the recent past and last few years’ digital payment systems have boomed. Different forms of new…

Q: Assume the following spot rates. Year Spot rate 1 3 2 4.5 3 5.5 Calculate the one-year…

A: The forward rate is the interest rate that the financial transaction gives for a future date. The…

Q: Luther Industries has a dividend yield of 3.6% and a cost of equity capital of 14%. Luther…

A: Cost of Equity = Dividend Yield + Capital gains Yield Capital Gains Yield is equal to the growth…

Q: a. How many shares must the venture capitalist receive to end up with 20% of the company? What is…

A: An investor that provides equity funding to the companies is known as a venture capitalist. These…

Q: A borrower and lender agree on a negative-amortizing loan in the amount of $300,000 at 4% interest…

A: Future value refers to the value at some future date on the basis of asset or loan amount present…

Q: Compute the projected after-tax operating cash flow for Steber during the coming year. E

A: Operating Cash Flows: Operating cash flows represent the cash generated by the firm from its normal…

Question

A Province of Manitoba $250,000 face value bond carrying a 2% coupon was issued
on December 1, 2006, with 30 years until maturity. On January 10, 2010, when
market yields were 4.19%, what is the premium or discount?
O $80,000 premium
$87,826 premium
$80,000 discount
$87,826 discount

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Given Information:

VIEW

Step 2: Calculation:

VIEW

Step 3: Conclusion:

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A $25,000 City of Kingston bond issued on July 17, 2007, with five years to maturity has a coupon rate of 5.12% It was sold on January 10, 2010, at a market rate of 4.18% Calculate the following: a) Market Value Accrued Interest Cash Price
A $5,000 Vancouver Internal Airport bond issued on June 7, 2004, with 14 years to maturity has a coupon rate of 4.42%. It was sold on January 7, 2010, when market rates were 4.07%: a) Market Value b) Accrued Interest c) Cash Price Solve using BA calculator
A $5,000, 3.2% coupon, twenty-year Ontario Hydro bond was issued on March 15, 2009. Calculate its flat price on and September 15, 2020, if the yield to maturity on the date was 6% compounded semiannually Multiple Choice $4,984.43 $4.271.97 $4,290.62 $4.454.97 $4.9001
A $25,000 Government of Canada bond was issued with a 25-year maturity and a coupon rate of 8.92% compounded semiannually. Two-and-a-half years later the bond is being sold when market rates have increased to 9.46 % compounded semiannually . Determine the selling price of the bond along with the amount of premium or discount .
The Province of Ontario issued a $175 million face value bond on March 1, 1995, carrying a 9.5% coupon with 50 years until maturity. The matching sinking fund, with the payment rounded up to the next $100, is expected to earn 6.3% compounded semi-annually, and will retire the debt in full upon maturity. 1. Calculate the annual cost of the bond debt 2. Calculate the book value of the debt on September 1, 2015
A zero coupon bond with a face value of $900,000 is issued on January 1, Year One. It will mature in ten years and was issued for $502,550 to earn an annual effective rate of 6 percent. If the effective rate method is used, what interest expense does the company recognize for Year Two (rounded)? Responses $38,128 $39,745 $30,153 $31,962
Fingen's 18-year, $1,000 par value bonds pay 13 percent interest annually. The market price of the bonds is $1,140 and the market's required yield to maturity on a comparable-risk bond is 10 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? Question content area bottom Part 1 a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? enter your response here%
A $3,000, 15 year bond with a 7.7% coupon rate was issued on July 28, 2007. It was sold on November 22, 2013 to yield the purchaser 6.9% compounded semiannually until maturity. What was the selling price of the bond? Multiple Choice $1,668.80 $3,227.80 $1,629.19 $1,665.00 $1,108.09
A 10-year annual payment corporate bond has a market price of $1,050. It pays annual interest of $100 and its required rate of return is 9 percent. By how much is the bond mispriced? 13 Multiple Choice $0.00 Overpriced by $14.18 Underpriced by $14.18 Overpriced by $9.32 Underpriced by $9.32 Mc Graw Hill Education Next > 13 of 20 < Prev டி
Fingen's 16-year, $1,000 par value bonds pay 11 percent interest annually. The market price of the bonds is $930 and the market's required yield to maturity on a comparable-risk bond is 14 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? Question content area bottom Part 1 a. What is your yield to maturity on the Fingen bonds given the market price of the bonds?
Fingen's 16-year, $1 comma 000 par value bonds pay 14 percent interest annually. The market price of the bonds is $1 comma 070 and the market's required yield to maturity on a comparable-risk bond is 11 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? Question content area bottom Part 1 a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? enter your response here%
A $23,000 bond redeemable at par on September 01, 2013 is purchased on April 17, 2002. Interest is 7.4% payable semi-annually and the yield is 7.2% compounded semi-annually. (a) What is the cash price of the bond? (b) What is the accrued interest? (c) What is the quoted price? (a) The cash price is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)