0
What do you call annual interest the issuer promises to pay on the face value bond?
Wiki User
∙ 13y ago
The coupon rate.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What are plain vanilla bonds?
A borrower (typically a company) will issue a bond in return for a loan. The bond is the finanicail instrument whereby the issuer promises to repay the loan (the bond face value amount) by a certain date. The bond instrument will state the applicable terms and conditions including the date for repayment and the interest rate. A vanilla bond will be a simple repayment plus interest instrument.
What is it called when a bond is selling for less than its face value?
A bond selling for less than its face value is classified as being sold at a discount. A bond can sell at a discount if interest rates increase or if the repayment ability of the bond issuer becomes questionable due to a reduction in the credit rating of the issuer.
The future value of a 1000 investment today at 8 percent annual interest compounded semiannually for 5 years is?
$1480.24
When is a bond par value generally repaid?
A bond is a type of a debt security, the approved issuer owes the holders a debt. The repayment period is often an agreement between the issuer and the holder.
What is the meaning of high yield corporate bonds?
High yield corporate bonds are issued by organizations that do not qualify for investment-grade ratings by credit rating agencies. These bonds are sold to raise capital for various purposes. The issuer agrees to pay interest and also return the face value of the bond.
What is the theory behind requiring bond issuers to charge bond discounts to interest expense when the discount is amortized?
When a bond matures the issuer has to pay the investor the full face value of the bond. The bond will also have a stated interest rate. If an investor will only accept a rate of interest which is higher than the stated interest rate, the issuer will likely sell the bond for less than the present value of the face value of the bond. For example, If a $100,000 bond is issued with a $4,000 discount to meet the buyers desired return, the issuer will have to pay the investor the $96,000 ($100,000-$96,000) the issuer received plus the $4,000 discount upon maturity. Since the issuer has to pay out that $4,000, upon maturity, to secure $96,000 the $4,000 discount is recognized by the issuer as interest expense (over the life of the bond).
The basic formula for computing interest on an interest-bearing note is face value of note x annual interest rate x time in terms of one year equals Interest?
(Face Value of Note) x (Annual Interest Rate) x (Time in Terms of One Year) = Interest
What are plain vanilla bonds?
A borrower (typically a company) will issue a bond in return for a loan. The bond is the finanicail instrument whereby the issuer promises to repay the loan (the bond face value amount) by a certain date. The bond instrument will state the applicable terms and conditions including the date for repayment and the interest rate. A vanilla bond will be a simple repayment plus interest instrument.
What is it called when a bond is selling for less than its face value?
A bond selling for less than its face value is classified as being sold at a discount. A bond can sell at a discount if interest rates increase or if the repayment ability of the bond issuer becomes questionable due to a reduction in the credit rating of the issuer.
What is the future value of 1200 a year for 40 years at 8 percent interest?
What is the future value of $1,200 a year for 40 years at 8 percent interest? Assume annual compounding.
What is the future value for 10000 invested for 5 years with an annual interest rate of 8 percent?
$14,693.28
What is the future value of 10000 for an interest rate of 16 percent and 1 annual period of compounding?
With only one year the value is 11600
The future value of a 1000 investment today at 8 percent annual interest compounded semiannually for 5 years is?
$1480.24
XYZ Corp sells its bonds at a premium and applies the effective interest method in amortizing the premium.Do you think the annual interest expense will increase or decrease over the life of the bonds?
It really depends on how much is the premium paid. Effectively if the premium paid is higher than the par value of the bonds issued, the annual interest expense would be relatively lower. Another perspective is that since that both the bonds and its premium uses effective interest method, considering all factors remain the same, the annual interest expense will remain unchanged. Premium of the bond should be captialized within the holders of the bonds and amortized over the years in which the manner best represents. Issuer of the bonds generally do not captialize the premium of the bond separately. You should also note that the bonds issued are not compound financial instruments or contain any embedded derivates.
What is current yield on a bond that the return is 10 percent with a 1000 par value bond with a 10 percent annual coupon and the bond pays interest annual and there are 3 years remaining?
8.5
How do you calculate capitalized value?
Capitalized value, or cost, is the sum of the all ANNUAL equivalent revenue payments and/or costs, divided by the interest rate involved, for infinite compound periods. Basically, how much revenue that project will generate or require if it is needed indefinitely long.Factor tables make calculating the annual equivalent values fairly easy. The formula for calculation is:A( 1/i )Where A is the sum of annual equivalent values and i is interest rate.
The value proposition consists of a cluster of benefits the company promises to deliver?
The value proposition consists of a cluster of benefits the company promises to deliver; it is
