Haulsee Inc. pays no dividend currently but is expected to start paying a small dividend next year. The 5-year-old firm has a be
1 answer:
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Answer: $86,235
Explanation:
Use Excel or a financial calculator to calculate the bond price.
As the interest is payable semiannually, the relevant variables are:
Coupon = 10% * 100,000 * 1/2 years = $5,000
Yield = 12% / 2 = 6%
Number of periods = 15 years * 2 = 30 semi annual periods
Bond price = $86,235
Answer:
$5837 approx
Explanation:
Amount =
Amount deposited at the end of year 1 would yield = $2500 = $2500 × 1.41158 = $3528.95
Amount deposited at the end of year year 3 would yield = $750 = $891.075
Amount deposited at the end of year 4 would yield = $1300 = $1417
Total deposit at the end of year 5 = $3528.95 + $891.075 + $1417 = $5837 approx.