Tom Cruise Lines Inc issued bonds five years ago at 51,000 per bond These bonds

Question

Tom Cruise Lines Inc issued bonds five years ago at 51,000 per bond These bonds had a 20-year life when issued and the annual interest payment was then 14 percent This return was in line with the required returns by bondholders at that point as described below Assume that five years later the inflation premium is only 2 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds The bonds have 15 years remaining until maturity Compute the new price of the bond Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator metheds (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)

Explanation / Answer

PV(0.11,15,-140,-1000,0)=1215.73

PV(new rate,annual payment,future value,payment made at end of period)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.