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Nutka1998 [239]
3 years ago
7

Excey Corp. has 10 percent coupon bonds making annual payments with a YTM of 9.5 percent. The current yield on these bonds is 9.

85 percent. How many years do these bonds have left until they mature?
Business
1 answer:
shtirl [24]3 years ago
5 0

Answer:

The number of years would be 4 years to maturity

Explanation:

Let the Face value (FV) be $1,000

So, the PMT will be 10% of Fv

PMT = 10% × $1,000

PMT =$100

Computing the Present Value (PV) of the bond as:

PV = PMT / Current Yield

where

PMT is payment monthly, which the 10% of coupon bond, that is $10

Current Yield will be 9.85% or 0.0985

Putting the values above:

PV = $100/ 0.0985

PV = $1,015.22

Now, computing the number of years using the Excel formula , which is as:

=Nper(rate,pmt,pv,fv,type)

where

Nper is number of years

rate is 9.5%

pmt is $100

pv is -$1,015.22

fv is $1,000

Putting the values above:

=Nper(9.5%,100,-1015.22,1000,0)

= 3.76 or 4 years

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At the beginning of the year, a firm had current assets of $121,306 and current liabilities of $124,509. At the end of the year,
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Answer:

E $21,903

Explanation:

Formula:

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3 years ago
Suppose our firm produces chartered business flights with capital (planes) and labor (pilots) in fixed proportion (i.e. one pilo
qaws [65]

Answer:

C. optimal capital labor ratio remains the same

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So, (x+y)A = C

So, A = C/(x+y) =B

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Now, wage rate increases to x'

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