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AveGali [126]
1 year ago
7

olmstead industry has 9.40% coupon bonds outstanding with a price of $1,023.58. interest is paid semiannually and the yield to m

aturity is 8.80%. the par is $1,000. how many years is it until these bonds mature?
Business
1 answer:
guapka [62]1 year ago
6 0

4.752 years (approximately 4.8 years) The bond would maturity in 4.752 years.

Applying the yield-to-maturity formula

YTM is equal to C + (fv - pv) /n (fv + pv) /2.

9.40% of the par value is the coupon rate C.

= (9.40/100)× 1000

= $94

Face value (par value) is equal to $1,000.

Price = Pv = $1,023.58

Yield to maturity is equal to 0.0880.

n = how many years before maturity?

Using the formula above;

0.0880= 94 + (1000-1023.58)/n ÷ (1000+1023.58)/2

0.0880= 94 + (-23.58)/n ÷ (2023.58)/2

0.0880= 70 + (-23.58)/n ÷ 1011.79

94 - (23.58)/n = 0.0880 × 1011.79

94 - (23.58)/n =89.03752

-23.58 / n =89.03752 - 94

-23.58 / n = -4.96248 ( Cross multiply)

-23.58 = -4.96248n

Add -4.96248 to both sides.

n = 4.752

The maturity period for the bond is 4.752 years (approximately 4.8years)

To know more about the maturity calculation visit here :

brainly.com/question/15588285

#SPJ4

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Answer:

b. steel purchased by the aircraft manufacturers.

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Describe the difference between period costs and product costs.
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Explanation:

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So, the period cost is the operating cost that are expenses when it is incurred

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Shaft and handle of weed trimmer  = Direct material cost

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Given : The probability of getting a defect components : 0.06

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7 0
3 years ago
ATech has fixed costs of $7 million and profits of $4 million. Its competitor, ZTech, is roughly the same size and this year ear
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As here, it is provided that profit for both the companies are same amounting $4 million.

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