Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The current stock price for a company is $40 per share, and there are 3 million shares outstanding. This firm also has 150,000 bonds outstanding,

The current stock price for a company is $40 per share, and there are 3 million shares outstanding. This firm also has 150,000 bonds outstanding, which pay interest semiannually. If these bonds have a coupon interest rate of 8%, 8 years to maturity, a face value of $1,000, and an annual yield to maturity of 8.9%, what is the total market value of this firm? (Answer to the nearest dollar, but do not use a dollar sign).

Correct Answer:262,389,491 2,000

I cant get this answer, I am off by 491

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

Recommended Textbook for

International Financial Management

Authors: Cheol S. Eun, Bruce G.Resnick

6th Edition

71316973, 978-0071316972, 78034655, 978-0078034657

More Books

Students also viewed these Finance questions

Question

Explain the process of Human Resource Planning.

Answered: 1 week ago