"be sure to identify any additional bases underlying your forecast and any assumptions."

Whiteside Corporation issues $500,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, th

umka2103 [35]

Answer:

$468,844 approx.

Explanation:

<u>Assumption</u>: <u>Since the question is incomplete, with the available information it has been construed that calculation of bond price is required and the question has been solved accordingl</u>y.

The price of a bond is the present value of future cash receipts it generates to the investor in the form of interest stream and principal stream.

$B_{0} = \frac{i}{(1\ +\ ytm)^{1} }\ +\ \frac{i}{(1\ +\ ytm)^{2} }\ +.....+\frac{i}{(1\ +\ ytm)^{n} } \ + \frac{RV}{(1\ +\ ytm)^{n} }$

wherein,

$B_{0}$ = price of bond as on today

i = annual coupon payments

ytm= investor's expectation of interest or market rate of interest on similar bonds

RV = Redemption value of such bonds assumed to be the face value

n = term to maturity

$B_{0} = \frac{22500}{(1\ +\ .05)^{1} }\ +\ \frac{22500}{(1\ +\ .05)^{2} }\ +.....+\frac{22500}{(1\ +\ .05)^{20} } \ + \frac{500000}{(1\ +\ .05)^{20} }$

$B_{0}=$ 12.46221 × 22,500 + 0.376889 × 22,500 = 280,399.725 + 188444.5

$B_{0} =$ $468,844 approx

This is the present value of the bond which is lower than it's face value because market rate of return of similar bonds is higher than the coupon rate of payment by Westside Corporation.

6 0

3 years ago

Rick and Joe get together and start a mortgage brokerage business. They each contribute $25,000 of capital to the business. Afte

bezimeni [28]

Answer:

a.common stock.

Explanation:

The additional $10,000 of owners equity after listing on the stock market will be named as common stock. After listing company issues shares for capital investment in it. Common stock is the appropriate term used for every addition in the owners equity. So the correct option is a.common stock.

7 0

2 years ago

Your grandparents put $10,200 into an account so that you would have spending money in college. You put the money into an accoun

expeople1 [14]

Answer:

Monthly withdrawal = $ 231.17 per month

Explanation:

Below is the calculation:

Deposit amount in the bank = $10200

Interest rate earned by the deposit = 4.19%

Monthly interest rate = 4.19% / 12 = 0.34917%

Number of periods = 4 years x 12 = 48

Amount in the account = Monthly withdrawal x (P/A, 0.34917%, 48)

10200 = Monthly withdrawal x 44.12246

Monthly withdrawal = 10200/44.12246

Monthly withdrawal = $ 231.17 per month

5 0

2 years ago

How is creating a report with the report wizard different from creating one with the report button?

pickupchik [31]

The creation of report with the report wizard differs from creating one with the report button because the report wizard allows the user to have more options and flexibility in the design.

<h3>What is a report wizard?</h3>

This refers to the self-service reporting solution that enables users to create business reports quickly and efficiently.

However, the creation of report with the report wizard differs from creating one with the report button because the report wizard allows the user to have more options and flexibility in the design.