1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nonamiya [84]
1 year ago
14

Bond P is a premium bond with a coupon rate of 8.2 percent. Bond D is a discount bond with a coupon rate of 4.2 percent. Both bo

nds make annual payments, have a YTM of 6.2 percent, and have seven years to maturity. Requirement 1: What is the current yield for bond P
Business
1 answer:
wlad13 [49]1 year ago
8 0

The current yield for bond P is 5.38%.

Current value of bond =  Face value/(1+ YTM)^n

Assuming the face value of the bond is $1,000 and substituting the values in the formula we get,

Current value of bond  =$1,000/((1+6.2%)^7)                   

                                      =$1,523.60

Annual coupon payment of Bond P = par value x coupon rate

Substituting the values in the formula we get,

Annual coupon payment of Bond P = $1,000 x 8.2%                                                                                                    = $82

The current yield of bond = annual coupon payment/ current value of bond

Substituting the values in the formula we get,

Current yield of bond = $82/ $1,523.60                                  

                                    = 5.38%

Hence,  the current yield for bond P is 5.38%.

Learn more about YTM:

brainly.com/question/17151706

#SPJ1

You might be interested in
What decisions does the business cycle help businesses make? check all that apply
Tasya [4]
<span>the answers is 2,4,5,6</span>
7 0
3 years ago
Torrey Co. manufactures equipment that is sold or leased. On December 31, 2021, Torrey leased equipment to Dalton for a five-yea
topjm [15]

Answer:

$850,000

Explanation:

The computation of Amount of income should Torrey realize from the lease transaction is shown below:-

Amount of income should Torrey realize from the lease transaction = Sale price - Cost

= $3,850,000 - $3,000,000

= $850,000

Therefore for computing the amount of income should Torrey realize from the lease transaction we simply deduct the cost from sales price.

5 0
3 years ago
An issuer decides to call in an outstanding bond issue under the terms detailed in the bond resolution because interest rates ha
tino4ka555 [31]

Answer:

An optional Call

Explanation:

Callable Bond

Callable bond represents an instrument of debt where the issuer issues the instrument reserving the right to make a return of the principal of investors including the stoppage of interest payments before the date of maturity of the bond.

Organisations would usually issue bonds as callable when either to meet unexpected obligations like pay off other debts, fund expansions or when they sense that opportunities may arise in the future for them to get other forms of financing at lower interest rates.

For bonds to be callable the terms must be clearly stated in the bond's offering.

Optional Call

In optional call, the issuer reserves the right to call the bonds to take advantage of present circumstances such as significant drop in interest rates (as stated in the question). However, the terms detailed in the bond resolution will allow the bondholders to receive a premium to par as compensation for their loss of interest payments on the called bond.

Furthermore, a period of time must usually pass before the issuer can use the optional call.

6 0
3 years ago
Strategic alliances refer to a.Multinational firms that have as many different product variations, brand names, and advertising
pentagon [3]

Agreements between two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value.

Answer: Option D.

<u>Explanation:</u>

Strategic alliance is the alliance of two or more firms or companies with each other. This alliance has been formed by tow or more companies with each other in order to achieve common goals.

But this does not mean that these firms and companies will give up their independence in forming their alliance. The goals for forming this is to earn profits and get access to the market.

3 0
3 years ago
A company's ____________ is the percentage of the total target market for the product that belongs to the company. A. Market sat
kotykmax [81]

It should be noted that a company's market share serves as the percentage of the total target market for the product that belongs to the company.

Market share can be regarded as the percentage of the total revenue that is been made in a particular market or in a business.

This serves as the amount of money that the company is able to make off the market.

Therefore, option B us correct because company's market share serves as the percentage of the total target market for the product.

Learn more about market share at:

brainly.com/question/4934175

5 0
3 years ago
Other questions:
  • Aztec Corp. is a manufacturer of truck trailers. On April 1, 2020, Aztec Corp. leases ten trailers to Wildcat Company under a si
    5·1 answer
  • Which of the following items are normally classified as current liabilities for a company that has a one-year operating cycle? (
    11·1 answer
  • The advanced industrial nations of the West committed themselves after World War II to removing barriers to the free flow of goo
    14·1 answer
  • May 3 Allied made its first and only purchase of inventory for the period on May 3 for 3,000 units at a price of $9 cash per uni
    13·1 answer
  • Your uncle is considering investing in a new company that will produce high quality stereo speakers. The sales price would be se
    6·1 answer
  • Michelle owns a rental property in San Diego that she has rented to Luis for four years. The street on which the house is locate
    9·1 answer
  • An adjusting entry was made on year-end December 31 to accrue salary expense of $2,200. Assuming the company does not prepare re
    11·1 answer
  • The city of Ashkelon, on the eastern end of the Mediterranean Sea, is one of the major cities of the Philistines. A powerful mer
    5·1 answer
  • How can we make a village or locality as beautiful as sarangkot ​
    8·1 answer
  • g 2. Problems and Applications Q2 Indicate whether each of the following transactions represents an increase in net exports, a d
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!