All categories

2 years ago

What is the current price of a zero-coupon bond with a 6 percent yield to maturity that matures in 15 years?

Business

1 answer:

zmey [24]2 years ago

4 0

The current price of a zero-coupon bond with a 6 percent yield to maturity that matures in 15 years is $417.27

A zero coupon bond is a bond in which the face fee is repaid at the time of maturity. That definition assumes a nice time price of money. It no longer makes periodic interest bills or has so-called coupons, consequently the term zero coupon bond. While the bond reaches adulthood, its investor gets its par cost.

Under is the system for calculating the prevailing fee of a zero coupon bond: charge = M / (1 + r)^n where M = the date of maturity r =interset price n = # of Years till adulthood If an investor wishes to make a four% go back on a bond with $10,000 par cost because of mature in 2 years, he could be inclined to pay: $10,000 / (1 + 0.04)^2 = $9,245. So, the bond is being bought at 92% of its face fee.

The biggest draw of zero-coupon bonds is their reliability. If you preserve the bond maturity, you may basically be assured a widespread return for your investment. That makes them beneficial for centered financial wishes, like college tuition or down charge on a home.

Learn more about zero coupon bond here brainly.com/question/28043768

#SPJ4

You might be interested in

The Plainfield Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term debt plus equity) of .52 and a

SCORPION-xisa [38]

Answer:

$13286.84

Explanation:

Given that

Current ratio = 1.41

Current liabilities =2465

Firstly, we calculate for current assets.

Recall that,

Current ratio = current assets / current liabilities

That is,

1.41 = current assets / $2,465

Therefore,

Current assets = $2,465 × 1.41

Current assets = $3475.65

Following that

We find Net Income

Again, recall that

Profit margin = net income / Sales

Where

Profit margin = 0.09 or 9%

Sales = 10,675

0.09 = net income / $10,675

Net income = 0.09 × $10,675

Net income = 960.75

Next step is to find for return on equity

Recall that

ROE = net income / total equity

Where,

ROE was given as 0.14

We got net income as 960.75

Hence,

0.14 = 960.75 / total equity

Total equity = 960.75 / 0.14

Total equity = $6,862.5

Long term debt ratio = long term debt / (long term debt + total equity)

1 / 0.52 = 1 + long term debt / (total equity / long term debt)

0.923 = (total equity / long term debt)

$6,862.5 / long term debt = 0.923

long term debt = 7,434.99

Recall that

Total debt = Current liabilities + long term debt

Thus,

Total debt = $2,465 + $7,434.99

Total debt = 9,899.99

Total asset is given as: total debt + total equity,

Thus,

Total assets = $9,899.99 + $6,862.5

Total assets = 16,762.494

Finally,

Recall that,

Net fixed assets = total assets - current assets

Therefore,

Net fixed assets = 16,762.494 - $3475.65

Net fixed assets = $13286.84

3 0

3 years ago

Now you have to get to work. Your first thought is to have seven members on the team, but management research indicates that sev

prisoha [69]

Now you have to get to work. Your first thought is to have seven members on the team, but management research indicates that seven members would be . It would be better to have people on the team.

In general, it's best to include members of only a single culture when forming virtual teams, since electronic communication is already fraught with misunderstandings.

<h3>What is electronic communication?</h3>

For more than a century, the market for communication electronics radio equipment has been expanding quickly. One of the factors contributing to the rapid expansion in the USA is homeland security. The field of electronics has grown phenomenally since the 1950s, when the "solid state" transistor was created, and the 1960s, when transistor-transistor logic and the IC (integrated circuit) were developed. This is currently evident in the "radio communications" industry. Sending traditional LMR (land-mobile radio) signals over the Internet (Internet Protocol) is the newest craze. This is known as RoIP (Radio over Internet Protocol), which is similar to VoIP (Voice over Internet Protocol) but uses radio instead of voice.

To learn more about electronic communication from the given link:

brainly.com/question/24043670

#SPJ4

7 0

2 years ago

When bonds are sold at a premium and the effective interest method is used, at each interest payment date, the interest expense:

Alex73 [517]

Answer:

decreases

Explanation:

When bonds are sold at a premium, it is sold at a price higher than the par value. For example, if the par value is $100, the bond would be selling at a premium if it is sold at $101. At expiration of the bond's tenor, the price of the bond must equal its par value, so at each each interest payment day, the interest expense decreases

3 0

3 years ago

You are waiting at a bus stop and the woman next to you is crying. You wonder why is so and make deduction that she cries becaus

Vinil7 [7]

Answer:

deduction theory cause your assumption was based on your instincts and it may not actually be the reason why the woman was crying

6 0

3 years ago

Consider Emily's balance statement:

notsponge [240]

Answer:

see below

Explanation:

A balance sheet is prepared following the accounting principles of assets equal to liabilities plus equity. Assets are left side while equity and liabilities on the other.

Assets are valuable that a business owns. Liabilities refer to the debts or loans of the business. It is what the business owes others. Equity is the owner's contribution to the business.

In this balance sheet, Emily has confused assets and liabilities.

The column labeled as liabilities represents assets. She should change that. This column should be the topmost column. She has interchanged the labels for liabilities and assets. The difference between assets and liabilities should be equity.

8 0

3 years ago

Read 2 more answers