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1 year ago

The discount rate that makes the present value of the bond's payments equal to its price is known as the?

1 answer:

8 0

The internal rate of return (IRR) of the bond is expressed as yield to maturity (YTM). The discount rate that compares the present value of future cash flows to the initial investment is known as the IRR for a project. The discount rate, as used in capital budgeting, is what brings the net present value (NPV) to a negative number.

Yield to maturity (YTM) is the overall rate of return that a bond will have earned once all interest payments are made and the principal is repaid. In essence, YTM represents the internal rate of return (IRR) on a bond if held to maturity.

The annual income from an investment, which includes dividend and interest payments, is divided by the security's current market value to determine a bond's current yield. The total return anticipated on a bond if it is held until its maturity date is known as yield to maturity (YTM).

Learn more about yield to maturity (YTM) here

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Assume that on 1/1/xx, a parent company acquired 90% interest in a subsidiary. The total fair value of the controlling and nonco

mrs_skeptik [129]

Answer:

balance sheet

investment on subsidiary X

investment on subsidiary above value- PPE 136,800

investment on subsidiary above value- Patent 64.800

investment on subsidiary above value- Consumer list 32,400

investment on subsidiary - goodwill 180,000

Explanation:

We will multiply the 480,000 difference between bok value and fair value by the 90% share of the parent company. Then, we divide by the useful life to know the amortization.

PPE 160,000 x 90% = $ 144,000

20 years useful life

amortization 7,200

PATENT 80,000 X 90% = $ 72,000

10 years useful life

amortization 7,200

CONSUMER LIST 40,000 x 90% = $ 36,000

10 years useful life

amortization 3,600

these will be the amrtzation during the year and decreasing the amounts of the value above book value.

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3 years ago

Merry Maidens Cleaning generally charges $300 for a detailed cleaning of a normal-size home. However, to generate additional bus

Kipish [7]

Answer:

The required entries relating to revenue recognized by Merry Maidens Cleaning on May 1 are:

Debit Cash [$300 x 0.9] $270

Credit Service revenue $270

(To recognize the service revenue from house cleaning)

Explanation:

Merry Maidens Cleaning offers service discount of 10% on a detailed cleaning of a normal-size home and charges $300, generally. This means, on May 1, Ms. E. Pearson was charged $270 ($300 x 0.9). Since the customer paid cash on the same date, the company would recognize it by debiting cash (for receipt of the money) and crediting revenue. Note that this does not necessarily means the company adopts the cash basis of accounting.

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3 years ago

Grameen Bank extends credit to the very poor to give them the opportunity to build better lives. Other businesses target poor pe

Dvinal [7]

Explanation:

Grameen bank is one of the pioneers in the world of Micro Finance Institutes, which not only provides the poor with access to financial capital but also helps them build a better business which allows them to escape from the poverty cycle. This lead to an overall upward economic movement in the society, improving the economic condition of a country as a whole. Through these micro finance loans, a number of SMEs (Small and Medium Enterprises) emerges which further provide employment opportunities to other people thus starting a virtuous cycle of economic growth.

As the economic condition of the poor becomes better, these poor people inturn becomes customer for these business for other products thus being a huge source of profit.

8 0

3 years ago

Lonergan, Inc., a calendar year S corporation in Athens, Georgia, had a balance in AAA of $200,000 and AEP of $110,000 on Decemb

Finger [1]

Answer:

Explanation:

AAA AEP

Beginning balance, 1/1/20 200,000 110,000

Less: Distributions (140,000) (0)

Less: Loss (ordinary) (120,000) (0)

Ending Balance (60,000) 110,000

Here AAA is adjusted first for the distributions and then for the loss. The negative balance must be restored to a positive before the shareholders may receive any distributions that will not be taxed as dividend income.

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3 years ago

. Suppose you bought 100 shares of stock at an initial price of $37 per share. The stock paid a dividend of $0.28 per share duri

PilotLPTM [1.2K]

Answer: $428

Explanation:

From the question, we are informed that one bought 100 shares of stock at an initial price of $37 per share and that the stock paid a dividend of $0.28 per share during the following year, and the share price at the end of the year was $41.

The total dollar return on this investment will be calculated as:

= 100(41 - 37 + 0.28)

= $428

4 0

3 years ago