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Rudiy27
3 years ago
8

BSW Corporation has a bond issue outstanding with an annual coupon rate of 7 percent paid quarterly and four years remaining unt

il maturity. The par value of the bond is $1,000. Determine the fair present value of the bond if market conditions justify a 14 percent, compounded quarterly, required rate of return.

Business
1 answer:
Liono4ka [1.6K]3 years ago
3 0

Answer:

$788.35

Explanation:

For computing the fair present value we need to apply the present value formula which is to be shown in the attachment below:

Given that,  

Future value = $1,000

Rate of interest = 14%  ÷ 4 = 3.5%

NPER =  4 years × 4 = 16 years  

PMT = $1,000 × 7% ÷ 4 = $17.5

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the formula, the fair present value is $788.35

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Answer:

1,2,4,3

Explanation:

Liquidity measures how quickly an asset can be converted and used as a medium of exchange.

$50 bill is the most liquid because it can be readily used as a medium of exchange without any conversion.

The funds in a savings account is the second most liquid because because it must first be withdrawn from a bank account before it can be used as a medium of exchange. It can be converted to a medium of exchange within a day.

A bond issued by a publicly traded company is the third most liquid because it takes a longer period for it to be converted to cash.

A boat is the least liquid because it takes a long while to find a buyer for a boat.

I hope my answer helps you.

4 0
3 years ago
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Target sales revenue = $7,830,000

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6 0
3 years ago
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FASB ASC 835-20-15-8

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