1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
SOVA2 [1]
3 years ago
8

One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000. Today,

the market interest rate on these bonds is 5.5%.
What is the current price of the bonds, given that they now have 14 years to maturity?

a) $1,077.01 b) $1,104.62 c) $1,132.95 d) $1,162.00 e) $1,191.79
Business
1 answer:
denis-greek [22]3 years ago
4 0

Answer:

e) $1,191.79

Explanation:

In order to find the price of a bond we need to know the future value of the bond, the interest rate on the bonds, the coupon payments and the time to maturity. In this case the future value of the bond is 1,000, the interest rate is 5.5%, the time to maturity is 14 years and the coupon payments are 7.5% which are (0.075*1,000)=75. Now we input all these values in a financial calculator and compute the present value/price.

FV= 1,000

I=5.5

N=14

PMT= 75

Compute PV=1,191

You might be interested in
It's an opportunity to give a good impression or introduction of yourself. It can capture the attention of a potential employer
GalinKa [24]

Answer:

Period

Explanation:

6 0
2 years ago
You have developed the following data on three stocks: Stock A has a standard deviation of .15 and a Beta of .79. Stock B has a
blondinia [14]

Answer:

As a risk minimizer : Stock A  has the lowest standard deviation, thus, it should be chosen, if it is to be held in isolation . Also stock B  has the lowest beta, thus,it should be chosen, if it is to be held as part of a well - diversified portfolio.

The answer is A and B respectively

Explanation:

The standalone risk or standard deviation of the stocks is alleviated for a well diversified investor  . So, in that case, the relevant risk would be the market risk or the beta.

When you see in isolation, relevant risk would be the standard deviation.

Therefore, as a risk minimizer : Stock A  has the lowest standard deviation, thus, it should be chosen, if it is to be held in isolation . Also stock B  has the lowest beta, thus,it should be chosen, if it is to be held as part of a well - diversified portfolio.

6 0
3 years ago
1. A creditor's claim to the property of an individual or business is called
skad [1K]

Answer:

c. liabilities.

Explanation:

liabilities are the creditors claims to the assets of the business/property.

7 0
2 years ago
Please help :( Marking brainly :D The money that a company has to pay its suppliers is called net profit.
Stels [109]

Answer:

B. False.  It's called trade payables.

Explanation:

5 0
2 years ago
Read 2 more answers
User add controls to a form
mixas84 [53]
Do you have a question about it?
5 0
3 years ago
Read 2 more answers
Other questions:
  • The Fremont (Ireland) Flyers were a semi-professional carriage racing team that competed up until the early 1930's. Mary Smith o
    10·1 answer
  • Ibtihal occasionally had garage sales at her home, and also sells a few items each month on Ebay. In one garage sale, she sold a
    7·2 answers
  • Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches
    11·1 answer
  • Certain contracts, such as those involving the sale of personal property for $500 or more:_______.
    6·1 answer
  • Jenny is a line manager at Maxvin Corp. She is assigned the task of understanding and gathering detailed information about the r
    13·1 answer
  • Mary kay, avon, and other cosmetic manufacturers produce and market their products on a worldwide basis including countries like
    9·1 answer
  • Suppose a negative externality exists in a market. if transactions costs are low and parties are willing to bargain then, accord
    14·1 answer
  • You wish to retire in 10 years, at which time you want to have accumulated enough money to receive an annual annuity of $13,000
    13·1 answer
  • Suppose the cost per hour incurred in operating a cruise ship is 3a + bv3 dollars per hour, where a and b are positive constants
    5·1 answer
  • A candy company has 115 pounds of cashews and 140 pounds of peanuts which they combine into two different mixes. The deluxe mix
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!