NAME: MASSAWE BARAKA‚ REG. NO: 2010-04-03894. 12 FINANCE 202 INDIVIDUAL ASSIGNMENT UDBS Consider a 10 year bond that has a face value shs 1000‚ a coupon rate of 6% and pays interest once a year. (a)Suppose person A bought this bond at par when it was initially issued and sold it 1 year later to person B for shs 1024.What is B’s total return? Soln Total return =[ Interest paid +(selling price – buying price)]/buying price Given; Annual interest paid = coupon rate x par value‚ coupon
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BOND PROBLEM SOLUTIONS 1. Six years ago‚ The Corzine Company sold a 20-year bond issue with a 14 percent annual coupon rate and a 9 percent call premium. Today‚ Corzine called the bonds. The bonds originally were sold at their face value of $1‚000. Compute the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price. PV = 1000; N = 6; PMT = 140; FV = 1090; CPT I/Y I/Y = 15.02% 2. You just purchased
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90‚000 Share of dividends (.25 × $160‚000) (40‚000) Balance in investment account $550‚000 2)During 2008‚ PK Co. purchased 2‚000‚ $1‚000‚ 9% bonds. The carrying value of the bonds at December 31‚ 2010 was $1‚960‚000. The bonds mature on March 1‚ 2015‚ and pay interest on March 1 and September 1. PK sells 1‚000 bonds on September 1‚ 2012‚ for $988‚000‚ after the interest has been received. PK uses straight-line amortization. The gain on the sale is Discount amortization: $40
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INTRODUCTION - The Swan Davis Corporation case focuses on following issues: The importance in bond and stock valuation; The capital structure of the company; and How they effects to the capital budgeting decisions of the company. - Swan- Davis Inc.‚ (SDI) manufactures equipment for sale to large contractors‚ the company was found in 1976 and it went to the public in 1980 at its shares value risen from $1 to $15 since it enter to the market. - The financial statements for the past three
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Using present value to value bonds A bond‚ from the perspective of the person issuing the bond is a form of long term debt. In the hands of the person who has acquired the bond it is an asset. The agency issuing the bond agrees to pay a fixed sum of money to the holder of the bond for a period of years and then‚ at the end of that period‚ to pay back the face value of the bond. Bonds can be issued by a variety of agencies/companies: 1. Municipal bonds: issued by cities‚ states and
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CONTENTS Introduction of bonds……………………………………………..01 Characteristics of Bonds…………………………………………01 Types of Bonds…………………………………………………… 06 Bonds Market……………………………………………………… 08 Introduction of Pakistan bond market……………...................08 How Bonds Trade……………………………………………….….09 Bond Price Variations……………………………………………..09 Bond valuation…………………………………………..................09 Types of bonds trade in Pakistan……………………………….10 Government Debt Securities……………………………………..10 Characteristics of MTBs and PIBs………………………………12
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This summary will focus into IDEO’s five-stage framework for designing and piloting radical innovation service. The summary will also explain augmented service offering model. Today‚ the marketplace is constantly evolving. Innovation is the name of the game. There is a constant need for organisations to keep on innovating but rarely do you see any innovative new service in the marketplace. Why are these innovations rare? Lack of ideas isn’t a problem cause they are in abundance. The main problem
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The article‚ “Offerings at The Wall‚” by Don Moser gives the reader a better understanding of why John Wilson leaves a gift at the wall each summer in honor of his friend‚ Leon because the article talks about how tons of different people bring offerings to their late loved ones and why they do such a thing. This quote from the short story‚ “Zebra‚” by Chaim Potok discusses about The Wall and what John Wilson did with Zebra’s drawings: “The photograph showed John Wilson down on his right knee before
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Kathy Elvidge Margaret Galvin English 111-15R 27 Jan 2013 The Women Covered By a Veil The Islamic veil is a very mysterious piece of garment that has very many questions behind it.What does the veil stand for and why do Muslim women wear them? Why is there so much controversy about this piece of cloth? Most Muslim women wear a veil to show respect for their religion and God"(Murphy15). They feel they are closer to Allah and are doing the right thing. (Murphy15) Wearing the veil for Muslim
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Initial public offering (IPO): An initial public offering (IPO) is a type of public offering where shares of stock in a company are sold to the general public‚ on a securities exchange‚ for the first time. Through this process‚ a private company transforms into a public company. Initial public offerings are used by companies to raise expansion capital‚ to possibly monetize the investments of early private investors‚ and to become publicly traded enterprises. A company selling shares is never required
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