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Novay_Z [31]
3 years ago
14

Grossnickle corporation issued 20-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000 one year ago. today,

the market interest rate on these bonds is 5.5%. what is the current price of the bonds, given that they now have 19 years to maturity?
Business
1 answer:
Dima020 [189]3 years ago
5 0
Bond valuation: 
<span>Par value = Maturity value = FV = $1,000 </span>
<span>Coupon rate = 7.5% </span>
<span>Years to maturity = N = 19 </span>
<span>Required rate = I/YR = 5.5% </span>
<span>(Coupon rate)(Par value) = PMT = $75 </span>
<span>PV = $1,232.15</span>
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Answer:

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Explanation:

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That is,

Marginal cost(MC)= change in total cost(TC)/ change in output

Total cost(TC): This is the addition of fixed and variable cost in production.

Total cost(TC)= fixed cost (FC)+variable cost (VC)

Fixed cost (FC) are cost that doesn't change during the production process such as buildings, machineries and furniture.

Variable cost (VC) are cost that changes or are used up during production process such as raw materials.

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