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
Nana76 [90]
3 years ago
13

1.The Broomfield Bricklayers has a bond issue outstanding with an annual coupon rate of 9%. The par value of the bond is $1,000.

Calculate the current yield of the bond if the bond’s current price was $974. See pages 174–176. 2. Refer to Additional Problem 1. If the sale price of this bond was $1,103 a year later, what is the capital gains yield? 3. Refer to Additional Problems 1 and 2. What would the total expected return for the bond be? 4. Refer to the bond valuation calculation on page 176 of the text. Using a financial calculator, solve for the present value of the 10-year bond on its issue date. The bond has a par value of $1,000, coupon rate of 10%, and a discount rate of 8%.
Business
1 answer:
Charra [1.4K]3 years ago
3 0

Answer:

answer 1.   9.24%

answer 2.   13.24%

Answer 3.  22.48%

Answer 4.   $1,134.20

Explanation:

answer 1

Coupon amount = Face value * coupon rate

=1000*9%

=$90

current price of bond=$974

Current yield = Coupon amount/current price of bond

=90/974

=0.09240246407 or 9.24%

answer 2.

sale price after one year = 1103

purchase price or opening price = 974

Capital gains yield = (Sale price - Purchase price)/Purchase price

=(1103-974)/974

=0.1324435318 or 13.24%

Answer 3

One year coupon received = $90

Expected return of bond = Current yield + Capital gains yield

=0.09240246407+0.1324435318

=0.2248459959 or 22.48%

Another formula:

Expected return on bond = (Coupon received + sale price - purchase price)/Purchase price

(90+1103-974)/974

=0.2248459959

or 22.48%

Answer 4

Calculator inputs

I/Y (discount rate)= 8%

N (number of periods ) = 10

PMT (coupon amount) = 1000*10% =100

FV (face value) = 1000

press CPT and then -PV

Answer will be $1,134.20

You might be interested in
Seidner Company has the following information available:
vova2212 [387]
It’s the answer C) 55,000
5 0
2 years ago
A method of estimating land value in which the net operating income attributable to the land is isolated and capitalized to prod
igomit [66]

Answer: Land Residual Method

Explanation:

Land residual method of site evaluation is the method of estimating land value in which the net operating income attributable to the land is isolated and capitalized to produce an indication of the land's contribution to the total property.

This particular method uses income as being the basis for value and is used in appraising income producing properties.

4 0
3 years ago
Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of ber
Firlakuza [10]

Answer:

SHEILA

Explanation:

A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.

Sheila's opportunity cost in producing berries = 10/40 = 0.25

Jim's opportunity  cost in producing berries = 8/24 = 0.33

Sheila has a lower opportunity cost in the production of berries and thus has a comparative advantage in the production of berries

7 0
3 years ago
Minimizing Inventory. An electronics store sells 100 digital storage devices per year. It costs $18 to store one storage device
jarptica [38.1K]

Answer:

Expl one year. To reorder, there is a fixed cost of $36, plus $11 for each storage device.anaMinimizing Inventory. An electronics store sells 100 digital storage devices per year. It costs $18 to store one storage device for one year. To reorder, there is a fixed cost of $36,tion:

4 0
2 years ago
The buyer and seller of merchandise must agree on who is responsible for paying freight terms. Show your understanding of freigh
Bas_tet [7]

Answer:

c,d and e

Explanation:

The correct statements given in the options are as stated below:

(c)-Terms FOB shipping point means the buyer accepts ownership when the goods depart the seller's place of business.

<em>This is true because Free on Board shipping means that the seller bears no liability whatsoever once the goods are shipped.</em>

(d)-When the shipping costs are the responsibility of the buyer, then the Merchandise Inventory account is debited for the freight charges.

<em>This is true because Free on Board shipping means that the seller bears no liability whatsoever once the goods are shipped, hence the shipping costs are the buyers responsibility and will form part of the costs of the goods</em>

(e)-Revenue for the sale will be recorded after the goods reach their destination, if the goods are shipped FOB destination.

<em>This is true because Free on Board destination means that the seller bears all liability whatsoever till the goods are delivered, hence the revenue for the goods can only be recognized upon successful delivery</em>

7 0
3 years ago
Other questions:
  • Jake owns Delta Dew, a small local California marijuana producer and dispensary. Jake complies with all applicable state laws an
    11·1 answer
  • Lupe wants an account into which she can deposit her paychecks. She also wants to use the money in her account to pay for her ex
    6·2 answers
  • The local government uses property taxes to pay for goods and services in the community. true or false
    12·2 answers
  • A sporting goods store is having a large sale event. baseball bats are marked down by 42%, and hockey sticks are marked down by
    7·2 answers
  • Otis Thorpe Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock
    8·1 answer
  • Uber's review of drivers average passenger rutings., in order to make personnel decisions, is an example of which of the followi
    9·1 answer
  • 1. Information regarding ethnic backgrounds and household income facilitates market segmentation. A. TrueB. False2. A marketing
    9·1 answer
  • Blush Bashful Cosmetics Inc. operates in 20 countries around the globe. The company clearly understands that the skin and hair t
    12·1 answer
  • Paunch Burger has a beta of 1.2 and just paid a dividend of $2.30 that is expected to grow at 3.2%. If the risk-free rate is 3%
    8·1 answer
  • Jacob is looking to buy some car insurance and is reviewing different policies from several different agencies. The first policy
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!