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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

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Why has America been referred to as " the land of opportunity"?
kozerog [31]

Same as with Canada which is where both my grandfathers came from. Let's see how many reasons I can come up with just off the top of my head and just for those two.

  1. They enjoyed the freedom of the First Amendment (speech, press, religion, assembly -- Canada has the same provision) that was not granted in the country they left. They never exercised those rights, I don't think, but their children and grandchildren did.
  2. They were free to raise their children so that they had the chance of being productive. My father was an MD, but he owed that piece of good fortune to his father. The country from which they came would never have allowed him to get all that education.
  3. They were able to eventually bring their wives and children with them. There was enough money to be made, even at jobs that didn't pay much, to bring them across the Atlantic.
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3 0
3 years ago
Read 2 more answers
Shirley’s and Son have a debt-equity ratio of .60 and a tax rate of 35 percent. The firm does not issue preferred stock. The cos
ikadub [295]

Answer:

d. 8.2%

Explanation:

The computation of the WACC is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

where,  

Weighted of debt = Debt ÷ total firm

= (0.60 ÷ 1.60)

= 0.375

And, the weighted of common stock = (Common stock ÷ total firm)

                                                              = 1 ÷ 1.60

                                                              = 0.625  

The total firm is

= 0.60 + 1

= 1.60

Now put these values to the above formula  

So, the value would equal to

= (0.375 × 8%) × ( 1 - 35%) + (0.625 × 10%)

= 1.95% + 6.25%

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8 0
3 years ago
The compressor division at Norco Corporation can buy the coils it requires either from the company's coil division or from the m
Molodets [167]

Answer:

c.

Explanation:

Based on the information provided within the question it can be said that the lower limit for setting the transfer price will be the variable cost of production for coil division. This is because the coil division price for it's coils is what is being looked at since it is determined by their production output and their capacity to meet the compressor division's requirements.

8 0
3 years ago
The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Production
Illusion [34]

Answer:

See below

Explanation:

The computation of carrying value on the balance sheet of the ending inventory of finished goods under variable costing is seen below;

Before that, we have to determine the unit cost

Unit fixed manufacturing overhead = $120,400 ÷ 6,020 units = $20

Then, the difference will be;

= Unit fixed manufacturing overhead × change in inventory in units

= $20 × (6,020 units - $5,920)

= $20 × 100 units

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7 0
3 years ago
a company has net working capital of 661. long term debt is $4024, total assets are $6,129, and fixed assets are $3,894. what is
BigorU [14]

Answer:

$5,598

Explanation:

The computation is shown below:

As we know that

Total assets = fixed assets + current assets

$6,129 = $3,894 + current assets

The current asset is $2,235

Now

net working capital = Current asset - current liabilities

$661 = $2,235 - current liabilities

So, the current liabilities is $1,574

Now the total liabilities is

= Current liabilities + long term liabilities

= $1,574 + $4,024

= $5,598

Hence, the total liabilities is $5,598

3 0
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