CONTEMP. FINANCIAL MGT.-W/MINDTAP V3
14th Edition
ISBN: 9780357292839
Author: MOYER
Publisher: CENGAGE L
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Chapter 17, Problem 8QTD
Summary Introduction
To discuss: The trade-offs involved in find the number of collection centers a firm should use.
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You are called in as a financial analyst to appraise the bonds of Ollie’s Walking Stick Stores. The $5,000 par value bonds have a quoted annual interest rate of 8 percent, which is paid semiannually. The yield to maturity on the bonds is 12 percent annual interest. There are 12 years to maturity. a. Compute the price of the bonds based on semiannual analysis. b. With 8 years to maturity, if yield to maturity goes down substantially to 6 percent, what will be the new price of the bonds?
Lonnie is considering an investment in the Cat Food Industries. The $10,000 par value bonds have a quoted annual interest rate of 12 percent and the interest is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. There are seven years to maturity. Compute the price of the bonds based on semiannual analysis.
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CONTEMP. FINANCIAL MGT.-W/MINDTAP V3
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