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neonofarm [45]
3 years ago
6

Compute the price of a 4.8 percent coupon bond with 10 years left to maturity and a market interest rate of 7.4 percent. (Assume

interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Business
1 answer:
Lana71 [14]3 years ago
8 0

Answer:

Price of bond=$820.72

Explanation:

Explanation:

<em>The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).</em>

<em>Value of Bond = PV of interest + PV of RV</em>

Let us assume the bond had a per value of 1000 and also redeemable at par

The value of bond for Jasper Inc can be worked out as follows:

Step 1

<em>Calculate the PV of interest payments</em>

Annual interest payment

= 4.8% ×  1000 = 48

PV of interest payment

= 48  × (1-(1.074)^(-10)/0.074)

= 48 ×6.8955

=330.9855967

Step 2

<em>PV of redemption Value</em>

PV = 1000 × (1.074)^(-10)

= 489.73

Step 3

Price of bond

=330.98 +489.73

=$820.72

Price of bond=$820.72

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River Enterprises has ​$502 million in debt and 22 million shares of equity outstanding. Its excess cash reserves are $ 15 milli
Sedbober [7]

Answer:

The stock price would be higher by $7.37

Explanation:

Free cash flow to equity = 195 million with a growth rate of 2% in perpetuity

Value of equity = Free cash flow to equity ÷ (Ce -g) = 195 million ÷ (13% - 2%)

= 190 ÷ 0.11 = $1,772,727,272.73 = $1,773 million

If growth rate is 3%, value of equity = 195 ÷ (13%-3%) = 195 ÷ 0.1 = $1,950  million

a. Value of stock = (1,773 + 15) million ÷ 22 = $81.27

b. Value of stock with 3% = 1,950 ÷ 22 = $88.64

Thus stock price would be higher by = b-a = $7.37

4 0
4 years ago
On May 3, 2017, Leven Corp. negotiated a short-term loan of $685,000. The loan is due October 1, 2017, and carries a 6.86% inter
Semmy [17]

Answer:

704076 $

Explanation:

Exact statement of the question is:

<em>May 3, 2007, Leven Corp. negotiated a short-term loan of $685,000. The loan is due October 1, 2007, and carries a 6.86% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)</em>

Solution:

Fro 3rd May to October 1st. 2017 there are 151 days

But 365 days = 1 year

==> 151 days = 151× 1/365 =0.414 years

But we use 1 year as one term

==> 1year = 1T

==>  T = 0.414

R= 6.86

P= 685000

A=?

We use formula for the term:

A= P(1+ \frac{R}{100} )^{T}

Where A= ammount at the end of term

P= Loan amount

R= Rate of interest

T= No. of terms

Putting values in this formula;

==> A= 685000×(1+\frac{6.86}{100}) ^{0.414}

==> A= 685000 × 1.02784938489=704076 $

6 0
3 years ago
A corporation ran an ad which showed environmental experts praising its social initiatives. The ad encourage readers to visit it
slamgirl [31]

Answer:

institutional copy.

Explanation:

In the scenario described above, the institutional copy style was used, which can be defined as a type of advertisement whose objective is not to sell a product or service, but rather to promote the selling company through its policies, philosophies and objectives, with the objective of strengthening and creating its reputation so that customers are aware of their values ​​and reputation, generating recognition and prestige.

This is what the company analyzed in the above question did by running an ad that shows environmental experts praising its social practices and encouraging readers to access its website and learn about its positive environmental practices

7 0
4 years ago
In 2019, selected automobiles had an average cost of $12,000. the average cost of those same automobiles is now $13,200. what wa
maksim [4K]

The rate of increase for these automobiles between the two time periods is  10%

<h3>What is automobiles?</h3>

Automobile is the wheeled vehicle usually having four wheels and generally used for the transportation purposes. For example :- car, buses, trucks, bike etc.

In the above case, the average cost of the automobile is $12000 in 2009 but now it has increased to $ 13200. For the calculation of the increased rate of the auto mobile following formula is used as follows:-

Increased rate = (current value -Initial value )/current value * 100

                         =( $13,200 -  $12,000)/  $12,000 *100

                          =$1200/ 12000 *100

                          = 10%

                           

Therefore, the rate of the increase for these automobile between 2 periods is 10%.

Learn more about increase rate here:

brainly.com/question/20820218

#SPJ1

5 0
2 years ago
Unknown hazards are:
ira [324]

a. defects that occurred during the manufacturing process

5 0
4 years ago
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