Zero-coupon bond

Acme Products, Inc., requires a new machine to produce a part for a heat generator. Two companies have submitted bids, and you have been assigned the task of choosing one of the machines. Cash flow analysis indicates the following: Year Machine A Machine B ---- --------- --------- 0 -$1,000 -$1,000 1 0 417…

The SML is determined by the following: T-bill rate = 8% with a beta equal to zero, beta for the market is 1.0, and the expected rate of return for the market is: 0.5 ( (20% + 5%) = 12.5% See the following graph. [pic] The equation for the security market line is: E(r) = 8% + β(12.5%…

For my term project I decided to research convertible bonds further and how they are used in the financial industry. Convertible bonds are extremely interesting as they represent a bond with a stock payout if exercised. Also Convertible bonds act like corporate bonds with lower interest rates because of their possible stock options. There is a give and take with convertible bonds because companies will offer lower yields on these bonds and there’s a possibility that their stocks fall or don’t…

Over the last 100 years Kraft Foods has developed a positive reputation for quality food, making them one of the world’s most recognized brands (Kraft Foods, 2014). They are a large multinational organization with branches in 72 countries and products sold in over 150 countries giving them a competitive edge and strong market presence in the food industry thus enhancing their financial portfolio (Kraft Foods). The large revenues generated allows Kraft Foods to build and maintain their…

The two career paths that I will critically evaluate in this essay derive from the finance industry. I will use the financial bodies involved, which are the CISI and the ICAEW to portray the steps needed which may increase the chances of gaining access to the finance sector. One of my preferred career options is investment banking, I will talk about the capital markets programme provided by the CISI to gain exposure towards this career path. Another option as a career for me is corporate finance…

Learning Team A Global Business Financial Environment ACC/300 Brandy Havens Alesia Batiste GM Motors uses SEC filings (US Securities and Exchange Commissions). Available-for-sale securities are one type of investment a company can make. Available-for-sale securities are any security not classified as a trading security or held to maturity security. These can either be debt or equity securities, however, the accounting is the same for each. An accountant must properly account and report…

20 45. On January 1, Talent Company purchased as a short-term investment a $1,000, 8% bond for $1,050. The bond pays interest on January 1 and July 1. The bond is sold on October 1 for $1,200 plus accrued interest. Interest has not been accrued since the last interest payment date. What is the entry to record the cash proceeds at the time the bond is sold? a. Cash....................................................................................... 1,200…

tolerance. I personally feel that properly educating individuals in personal finance and investing would mitigate the need to expand on the current rating system for mutual funds. Financial loss from investing comes from a permanent decrease in value (bond defaults) or from a temporary decrease in value (market correction) which is realized when sold. Proper financial planning can minimize the chance that an individual’s investment will be valued less than what the individual needs at the time.…

Despite the fact that Mortgage Backed Securities are not specifically identifiable on a bank 's monetary record it is still conceivable to a specific degree to sift them through. As specified in the Literature Section, banks don 't exclusively offer their home loan credits, additionally hold them after they are securitized to offer them by themselves. The Securities available to be purchased contains those Mortgage Backed Securities on a bank 's monetary proclamation which a bank offers…

1a) Euro Interbank Offered Rate (Euribor)- rates offered to prime banks based in the Eurozone on euro interbank term deposits Background info: Euribor was first published on 30 December 1998. 1 January 1999 was the day that the Euro as a currency was introduced. In the years, before a lot of domestic reference rates like PIBOR (France) and FIBOR (Germany) existed. There are currently 8 different kinds of Euribor rates where they are selected to ensure that the diversity of the euro money…