5. A securities firm has provided the balance sheet below.Assets ($ millions)$ 34Liabilities and Equity ($ millions)Short-term fundingCash$ 27Debt securities175Bonds300Equity securities400Debentures197Other assets12Equity97Total Assets$ 621Total Liabilities and Equity$ 621The debt securities have an annual 7.25% coupon rate, 22 years to maturity and a yield to maturityof 6.75%. The market value of the equity securities and the other assets is equal to their book value.The firm has 500,000 shares outstanding and the price per share is $35.67.a. Calculate the firm's aggregate indebtedness to net capital ratio.b. Calculate the firm's highly liquid assets to total liabilities ratio.Based on the firm's ratios from a and b, is it in compliance with Rule 15C 3-1? Why or why not?C.

Debt securities are debt securities that can be bought and sold between two parties and have the…

Answered: A securities firm has provided the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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David Palmer identified the following bonds for investment: 1. 1) Bond A: A $1 million par, 10% annual coupon bond, which will mature on July 1, 2025. 2. 2) Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031. 3. 3) Bond C: A S1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026. The three bonds were issued on July 1, 2011. (a) If Bond B is issued at face value and both Bond Band Bond A are having the same yield to maturity (EAR) at issuance, calculate the market price of Bond A on July 1, 2011.
You are the portfolio manager of a large company that invests in many securities including corporate bonds. You have been assigned the task of bond portfolio management. You are provided with the following data in relation to bonds: Maturity period 15 years Coupon rate 12% Par value $1,000 Coupons on bonds are paid annually Yield to maturity of bonds 8% Required: i) Calculate the Macualay’s duration, modified duration and convexity ii) Calculate the change in bond price when yield to maturity changes by one percent using modified duration iii) Calculate the change in bond price when yield to maturity changes by one percent when convexity is considered Please show me the details calculation.
Gadget Co invests in a $100,000 bond with an 8% coupon rate. The market rate of interest is 10% annually and it is a 5 year bond 1. Assuming the company invests on January 1st and only pays $92,418 for this bond, what is the journal entry on January 1st? 2. Prepare a full amortization table for this bond: Purchase Year 1 Year 2 Year 3 Year 4 Year 5 Cash Received Interest Revenue Amortized Value Carrying Value stess Questions 3 and 4 on the next tab +
You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (Ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Williams Company (WICO) Yield to maturity Coupon 7.20 7.30 ?? % Maturity January 15, 2039 January 15, 2033 January 15, 2035 Last Price Last Yield ?? 6.38 7.20 94.399 ?? 94.915 What is the yield to maturity for the bond issued by Xenon, Incorporated? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Estimated $ Volume (000s) 57,380 48,959 43,820
Subject - account Please help me. Thankyou.
Domestic
A firm has liabilities of $98 in one year, $100 in two years, and $107 in three years. The firm exactly matches its liabilities by purchasing the following zero or annual coupon bonds redeemable at par: Bond Maturity Par Value Coupon Rate Effective Yield A 1 year 100 5% 3% B 2 years 100 0% 4% C 3 years 100 4% 5% Find the number of units of Bond A that must be purchased to match the liabilities exactly. (A) 0.894 (B) 0.897 (C) 0.913 (D) 0.933 (E) 0.959
1) AzTurk Company is decided to issue 1,000 AZN par value bonds with an 12 % coupon paid semi-annually with a 5- year maturity. At the market, same type of bonds with same maturity and same risk level is trading at 1,100 AZN. Briefly explain how to calculate yield to maturity and current yield. What is the difference between yield to maturity and current yield?
Assets, Incorporated, plans to issue $6 million of bonds with a coupon rate of 7.8 percent, a par value of $1,000, semiannual coupons, and 25 years to maturity. The current market interest rate on these bonds is 7.1 percent. In one year, the interest rate on the bonds will be either 9 percent or 5 percent with equal probability. Assume investors are risk-neutral. a. If the bonds are noncallable, what is the price of the bonds today?
MLK Bank has an asset portfolio that consists of $180 million of 15-year, 10.5 percent annual coupon, $1,000 bonds that sell at par. b-1. The duration of these bonds is 8.1702 years. What are the predicted bond prices in each of the four cases using the duration rule? (the cases being ± 0.10 percent and ± 2.00 percent)
Subject:- finance
A) BOND VALUATION: DeBond Industries has outstanding a $1,000 face-value bond with an8% coupon interest rate. The bond has 12 years remaining to its maturity date.a) If interest is paid annually, find the value of the bond when the required return is (1) 7%, (2)8%, and (3) 10%.b) Indicate for each case in part a whether the bond is selling at a discount, at a premium, or at itspar value.c) Using the 10% required return, find the bond’s value when interest is paid semiannually.B) AMORTIZATION: Suppose you borrow $1,200,000. You are going to repay the loan bymaking equal annual payments for five years. The interest rate on the loan is 12 percent per year.Prepare an amortization schedule for the loan. How much interest will you pay over the life of theloan? What fraction of the payment made at the end fourth year will represent repayment ofprincipal?

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