Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(Interest Rate risk) Bond S has 4 years to maturity. Bond Thas 30 years to maturity. Both have 9% coupons paid semi-annually, and are

image text in transcribedimage text in transcribed

\image text in transcribed

(Interest Rate risk) Bond S has 4 years to maturity. Bond Thas 30 years to maturity. Both have 9% coupons paid semi-annually, and are priced at par value. If the interest rate(yield to maturity) suddenly drops by 1.6%, the percentage change in the price of Bond Tis % (Keep two decimal numbers and the sign.) (Interest Rate risk) Bond S has 4 years to maturity. Bond T has 30 years to maturity. Both have 9% coupons paid semi-annually, and are priced at par value. If the interest ratelyield to maturity) suddenly rises by 2.4%, the percentage change in the price of Bond S is % (Keep two decimal numbers and the sign.) At year-end 2002, Yung.com had notes payable of $1200, accounts payable of $2400, and long-term debt of $3000. Corresponding entries for 2003 are $1600, $2000, and $2800. Asset values are below. During 2003, Yung.com had sales of $1000, cost of goods sold of $400, depreciation of $100, and interest paid of $150. The (average) tax rate is 21% and all taxes are paid currently. The company has 100 shares of common stock outstanding at the end of 2003. Total dividends paid is $120 in 2003. Current Asset 2002 2003 Cash $800 $500 Marketable securities 400 300 Accounts receivable 900 800 Inventory 1800 2000 Fixed Assets Net Fixed Asset (Plant&Equipment) $6000 $8000 In 2003, the (addition to) Retained Earnings is $ Your client is 26 years old. She wants to begin saving for retirement at 65, with the first payment to come one year from now. She can save $9,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 9% in the future. She expects to live for 20 years after she retires at 65. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement? $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

5. Define knowledge repository and describe how to create one.

Answered: 1 week ago