Question
In: Finance
XYZ Ltd wishes to raise $20 million to fund its investment projects. d) The company is...
XYZ Ltd wishes to raise $20 million to fund its investment projects.
d) The company is planning to issue 10-year semi-annual coupon bonds with a coupon rate of 6% and a face value of $1,000. The effective annual yield to maturity of investors is expected to be 8% per annum. Calculate the required number (expressed in integer) of semi-annual coupon bonds to raise $20 million.
e) Alternatively, XYZ Ltd is looking into issuing 15-year zero-coupon bonds with a face value of $1,000. The desired nominal yield to maturity of investors is expected to be 8% compounded semi-annually. Calculate the required number (expressed in integer) of zero-coupon bonds to raise $20 million.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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Answer two questions below: Question 12: What are the two methods...
TB12 corp is considering a project that will cost $20 million initial investment. The company projects...
TB12 corp is considering a project that will cost $20 million
initial investment. The company projects to have payoffs of $5 mil,
$8 mil, $8 mil, $6 mil, $4 mil in years 1, 2, 3, 4 and 5
respectively. Due to COVID-19, there is a 10% chance that the
company can get nothing back from their initial investment. The
company current cost of capital is 10% p.a. compounded annually.
Answer two questions below:
Question 12: What are the two methods...
TB12 corp is considering a project that will cost $20 million initial investment. The company projects...
TB12 corp is considering a project that will cost $20 million
initial investment. The company projects to have payoffs of $5 mil,
$8 mil, $8 mil, $6 mil, $4 mil in years 1, 2, 3, 4 and 5
respectively. Due to COVID-19, there is a 10% chance that the
company can get nothing back from their initial investment. The
company current cost of capital is 10% p.a. compounded annually.
Answer two questions below:
Question 12: What are the two methods...
(d) A fund held by an investment manager had a value of RM2 million on 1...
(d) A fund held by an investment manager had a value of RM2
million on 1 January 2019. RM2.5 million was invested on 1 May
2019. Immediately after this investment, the value of the fund was
RM2.1 million. At the close of business on 31 December 2019, the
value of the fund was 4.2 million.
(i) Calculate the time-weighted rate of return for 2019.
(ii) Calculate the dollar-weighted rate of return for 2019.
(iii) Comment on your answers to part...
XYZ Company will invest with an initial investment of $ 1 million. The assumption of a...
XYZ Company will invest with an
initial investment of $ 1 million. The assumption of a market
interest rate of 5% and cash flow for 5 years is expected as in the
table below:
year
Cash Flow
1
425.000
2
384.000
3
321.500
4
282.500
5
200.000
Calculate the payback period and Net
Present Value (NPV)
Axelrod Ltd. wishes to accumulate its cash so it will have $8.06 million sometime in the...
Axelrod Ltd. wishes to accumulate its cash so it will have $8.06
million sometime in the future. Independent of any financial
information provided for Axelrod in its financial statements,
assume they invest $1.15 million annually over 5 years, starting
today, assuming a 4.5% per annum return. They stop investing after
their 5th deposit of $1.15 million. They will then leave the
accumulated funds in their account to grow until it reaches their
goal of $8.06 million How many years in...
Axelrod Ltd. wishes to accumulate its cash so it will have $8.06 million sometime in the...
Axelrod Ltd. wishes to accumulate its cash so it will have $8.06
million sometime in the future. Independent of any financial
information provided for Axelrod in its financial statements,
assume they invest $1.15 million annually over 5 years, starting
today, assuming a 4.5% per annum return. They stop investing after
their 5th deposit of $1.15 million. They will then leave
the accumulated funds in their account to grow until it reaches
their goal of $8.06 million How many years in...
consolidated company needs to raise capital. its investment banker suggest that 20-year zero coupon bonds could...
consolidated company needs to raise capital. its investment banker
suggest that 20-year zero coupon bonds could be sold at a yield to
maturity of 8%. what is the market value of each zero coupon bond
using the semi-annual formula?
a. $208.29
b. $224.54
c. $204.69
d. $218.52
jon has just issued a 20 year, 10% coupon rate, $1,000 par
bond that pays interest semi-annually. the required return is
currently 8 percent and the company is certain that it will remain...
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