Question
1) Dan is considering the purchase of Super technology, Inc. bonds that were issued 3 years ago. When the bond were originally sold they had
1)
Dan is considering the purchase of Super technology, Inc. bonds that were issued 3 years ago. When the bond were originally sold they had a 25-year maturity and a 6.35 percent coupon interest rate, paid annually. The bond is currently selling for $1,317. Par value of the bond is $1,000. What is the yield to maturity on the bond if you purchased the bond today?
Round the answer to two decimal places in percentage form.
You should use excel or Financial calculator.
2)
Find the profitability index (PI) for the following Series of future cash flows, assuming the company's cost of capital is 8.10 percent. The initial outlay is $318,916.
Year 1: $186,520
Year 2: $167,264
Year 3: $122,642
Year 4: $162,944
Year 5: $167,400
Round the answer to two decimal places.
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