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
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

You might be interested in
Which of the following statements about the Arbitrage Pricing Theory (APT) are correct? Check all that apply. The APT maintains
Klio2033 [76]

Answer: The APT identifies all relevant factors that affect the realized returns on stocks.

Explanation:

Arbitrage pricing theory (APT) is an idea that has to do with the fact when the linear relationship between the macroeconomic variables and the expected return of an asset are analysed, such assets return can be forecasted.

In arbitrage pricing theory, several risk factors are used in determining prices. It also identifies all relevant factors that affect the realized returns on stocks.

4 0
3 years ago
​Kim's Retail had 800 units of inventory on hand at the end of the year. These were recorded at a cost of $ 13 each using the la
nataly862011 [7]

Answer:

the Merchandise Inventory will be credited by $3200

Explanation:

given data

Retail  inventory = 800 units

recorded cost = $13

replacement cost = $ 9 per unit

selling price charged = $15

to find out

the Merchandise Inventory will be

solution

we know here market  is equal to current replacement cost that is $9

and here we can say

market is here less than cost

so inventory will be valued at Market

so we find

down in inventory is = 800 × ( 13 - 9 )

down in inventory is = 3200

so the Merchandise Inventory will be credited by $3200

5 0
3 years ago
Why is it important to start saving for retirement early?
forsale [732]

Answer:

A

Explanation:

Saving early will allow you to gain more money because your interest will build over time.

4 0
3 years ago
Read 2 more answers
Compute cost of goods sold using the following information: Finished goods inventory, beginning $ 540 Cost of goods manufactured
SVEN [57.7K]

un u get the numbers then subtract them and come good with the answer

4 0
3 years ago
A company bought a parcel of land twenty years ago. The land is currently worth $575,000. The yearly appreciation rate has been
tekilochka [14]

Answer:

The company paid $278,031

Explanation:

Giving the following information:

A company bought a parcel of land twenty years ago. The land is currently worth $575,000. The yearly appreciation rate has been 3.7%.

<u>To calculate the past value of the land, we need to use the following formula:</u>

PV= FV/(1+i)^n

PV= present value (20 years ago)

n= 20

FV= 575,000

i= 0.037

PV= 575,000 / (1.037^20)

PV= $278,031

3 0
3 years ago
Other questions:
  • All of the following are characteristics of SMART goals except
    7·1 answer
  • Each of the svps has many questions for you. you give each time to pose the questions, and you take time to answer each question
    10·1 answer
  • Most manufacturers of vehicles equipped with diesel engines allow what type of biodiesel?
    8·1 answer
  • In its simplest form, Amdahl’s Law maintains that if a given program would take one hour to run to completion with one processor
    12·1 answer
  • Anna saved ​$13 comma 29313,293​, which was​ 70% of the amount she needed for a used car. what was the total amount she needed f
    14·1 answer
  • Costs that differ directly with the level of production are known as ________.
    13·1 answer
  • Ottawa, Inc. provides the following data: 2019 2018 Cash $23,000 $22,000 Accounts Receivable, Net 37,000 37,000 Merchandise Inve
    12·1 answer
  • Jacqueline, a brilliant new ph.d. in economics, has turned down many job offers because she hopes eventually to teach at one of
    8·1 answer
  • Transactions that affected Barter Company’s stockholders’ equity during 2015, the first year of operations, follow.
    11·1 answer
  • if a start up business owner invests $25,000 cash and then borrows $15,000 from a bank, the owner's equity would be
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!