Module9HWSol - Module 9 Chapter 4 D17 & 18 We assume...

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Module 9 Chapter 4 D17 & 18 We assume interest rate is constant. The true cost of the loan is . Time, n B n-1 PP n IP n A n 1 $50,000,000 $10,000,000 $3,250,000 $13,250,000 2 $40,000,000 $15,000,000 $2,600,000 $17,600,000 3 $25,000,000 $15,000,000 $1,625,000 $16,625,000 4 $10,000,000 $5,000,000 $650,000 $5,650,000 5 $5,000,000 $5,000,000 $325,000 $5,325,000 D20 Equating the purchase price and payment received D21 Since the bond is purchased at par, yield to maturity will be the coupon rate, which is 6.5% ÷ 2 = 3.25% per 6 months, or 1.0325 2 1 = 6.61% per year. D22 Coupon payment = $10,000 × 0.065 / 2 = $32.50. Equating the purchase price and payments received Using Goal Seek, the yield is 3.67% per six months. Hence the annual yield is . D27 Number of stocks at the end of 20414 = 50 × 2 3 × 3 = 1,200. Equating the amount paid and received,
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A4 a) Period Interest Principal Total Loan Balance 0 -- -- -- $2,500,000.00 1 $75,000.00 $156,250.00 $231,250.00 $2,343,750.00 2 $70,312.50 $156,250.00 $226,562.50
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This note was uploaded on 01/11/2012 for the course EIN 4354 taught by Professor Tufecki during the Fall '08 term at University of Florida.

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Module9HWSol - Module 9 Chapter 4 D17 & 18 We assume...

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