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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

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A. Stock

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A(n) _____ is a variation of a referral where, in addition to requesting the names of prospects, the salesperson asks the prospe
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Explanation:

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The bank statement contained two bank memoranda:1. A credit of $2,242.00 for the collection for Bogalusa Company of an electroni
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Cash                         2,157 debit

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To record the bank memorand:

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Answer:

b. rightward shift of aggregate demand and a leftward shift of aggregate supply.

Explanation:

The U.S. experience of strong economic growth, full employment, and price stability in the late 1990s and early 2000s can be explained by a rightward shift of aggregate demand and a leftward shift of aggregate supply.

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Jason may lose the case as a result of the seniority system.

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