What is the duration of the following bond: $1,000 par value, 6% annual coupon, 4 years to maturity, and yield to maturity of 6.5%? In the prior question, what is the present value of the bond?

Q: DEFINE credit policy

A: Credit policy is the set of policies governing a company’s credit sales, outstanding amounts;…

Q: describe uses and limitations of the balance sheet in fi nancial analysis;

A: Introduction: The balance sheet provides users with information on the firm’s assets, liabilities…

Q: Working Capital

A: Working capital = Current Assets - Current Liabilities  We know that current assets and current…

Q: Type of CPM Loan?

A: Introduction: CPM refers to constant payment mortgage, this is nothing but an arrangement…

Q: fferent ty

A: Define interest. In finance, or economics interest can be defined as the payment of a proportion…

Q: Define mezzanine loan?

A: Mezzanine funding: Mezzanine funding is a type of funding that has together the characteristics of…

Q: ExplainValuing REITs as Investments?

A: Valuing REITs as investments: A typical way for the calculation of REIT is to find the Net asset…

Q: Write the methods of Calculating Interest?

A: Methods of calculating interest: The basic and fundamental methods for calculating interests are…

Q: Define credit enhancement

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: Define reinvestment rate risk

A: Reinvestment means investing without withdrawing the benefits (or) interest from the fund so that it…

Q: Define Interest cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Define Capital Market Line (CML)

A: Introduction: Risk refers to the degree of volatility involved in the anticipated return on…

Q: What can be considered collateral. What is collateral

A: Collateral is an asset or property that a borrower pledges as security for a loan or credit. If the…

Q: Define Loan Refinancing?

A: Introduction: A loan refinancing permits a debtor to replace their present obligation of debt with…

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.