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1 year ago

What is the current yield for a $1000 corporate bond that pays 8.0 percent and has a current market value of $870?

Business

1 answer:

alexandr402 [8]1 year ago

4 0

The current yield for a corporate bond = 9.19 %

Calculation :

Amount of annual interest = face value × rate of interest

= $1000 × 8.0

= 8000%

Then, Current yield = amount of annual interest / current price

= 8000% ÷ $870

= 9.19 %

Do corporate bonds pay interest?

Corporate bonds pay interest semi-annually, which suggests that, if the coupon is five percent, each $1000 bond can pay the bondholder a payment of $25 every six months--a total of $50 per year

What Is the Current Yield?

Current yield is an investment's annual income (interest or dividends) divided by the present price of the security. This measure examines the present price of a bond, instead of looking at its face value.

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Answer:

Prices act as a signal that tells producers and consumers how to adjust. Prices tell buyers and sellers whether goods are in short supply or readily available. The price system is flexible and free, and it allows for a wide diversity of goods and services.

Explanation:

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3 years ago

This morning, TL Trucking invested $75,000 to help fund a company expansion project planned for 4 years from now. How much addit

sweet [91]

Answer:

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Explanation:

Principal Amount = P = $75,000

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If rate of return is 4%

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A = $75,000 ( 1 + 0.04 )^4

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A = $75,000 ( 1 + 0.05 )^4

A = $75,000 x 1.21551

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Additional Amount Earned = $91,163 - $87,740 = $3,423

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3 years ago

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weqwewe [10]

Answer and Explanation:

The journal entries are shown below:

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3 years ago

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