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
Marina86 [1]
3 years ago
10

15-year bonds 2 years ago at a coupon rate of 7.3 percent. The bonds make semiannual payments. If these bonds currently sell for

103 percent of par value, what is the YTM?
Business
1 answer:
svp [43]3 years ago
8 0

Answer:

The answer is 6.95%

Explanation:

We are looking for Yield-to-maturity (YTM). YTM can also be called rate of return or discount rate.

Note: The 15 -year bond was bought 2 years ago, meaning it remains 13 years

N(Number of periods) = 26 years ( 13years x 2)

I/Y(Yield to maturity) = ?

PV(present value or market price) = $103

PMT( coupon payment) = $3.65( [(7.3percent ÷ 2)x $100)]

FV( Future value or par value) = $100

We are using a Financial calculator for this.

N= 26; PMT = 3.65; FV= $100; CPT PV= -103, CPT I/Y

I/Y = 3.47.

3.47% is for semiannual rate

Therefore, annual rate is 6.95% (3.47% x 2)

You might be interested in
The most efficient combination of resources in producing a given output is the combination that:
blondinia [14]

Answer:

Option (b) is correct.

Explanation:

(a) If a producer uses the almost same quantities of all the factors of production and if marginal output remains the same then this will lead to no gains.

(b) This is done by purchasing the combination of inputs which are yielding higher marginal outputs.

(c) This would result in a loss because all the resources are not utilized properly or we can say that resources are not used at their potential.

(d) For achieving the level of profits, labor should be devoted to the work for maintaining the higher level of growth in production.

8 0
3 years ago
The optimal capital structure has been achieved when the: debt-equity ratio is equal to 1. debt-equity ratio results in the lowe
icang [17]

The optimal capital structure can be realized if : Debt-equity ratio selected results in the lowest possible weighted average cost of capital.

  • An optimal capital structure can be regarded as best mix of debt as well as equity financing which maximizes a company's market value.

  • And as well minimizing its cost of capital, it can be realized when Debt-equity ratio  that is been selected, gives the lowest possible weighted average cost of capital.

Learn more at:

brainly.com/question/10782180?referrer=searchResults

3 0
2 years ago
What is bank run ? in your own words.​
postnew [5]

Answer:

A bank run occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future

Explanation:

A bank run occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future

8 0
3 years ago
The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $15.90 for each of the 25 million shares s
Studentka2010 [4]

Answer:

22.38%

Explanation:

Raven corporation has just gone public

They received $15.90 for each 25 million shares that was sold

The first step is to calculate the net amount raised

Net amount that was raised= 15.90×25,000,000 = 397,500,000

397,500,000-860,000-330,000

= 396,310,000

Underwriter spread= 17.50-15.90

= 1.6 per shares

Total underwriter spread= per share spread× number of shares that were offered

= 1.6×25,000,000

= 40,000,000

Total direct costs= 40,000,000+860,000

=40,860,000

Indirect flotation cost= indirect cost+price appreciation

= 330,000+(19.40-17.50)×25,000,000

= 330,000+1.9×25,000,000

=330,000+47,500,000

= 47,830,000

Total flotation cost= 47,830,000+40,860,000

= 88,690,000

Therefore, the flotation cost as a percentage of funds raised can be calculated as follows

= 88,690,000/396,310,000 × 100

= 0.2238×100

= 22.38%

Hence the flotation costs as a percentage of funds raised is 22.38%

3 0
3 years ago
You have $7,800 to deposit. Regency Bank offers 6 percent per year compounded monthly (.5 percent per month), while King Bank of
hammer [34]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

PV= $7,800

Regency Bank:

i= 0.5 percent per month

n= 19*12= 228

King Bank:

i= 6 percent annually

n=19

To calculate the final value of each bank we need to use the following formula:

FV= PV*(1+i)^n

Regency bank:

FV= 7,800*(1+0.005)^228= $24,319.61

King bank:

FV= 7,800*(1.06)^19= $23,599.68

6 0
3 years ago
Other questions:
  • The epa tries to balance protecting business interests with protecting
    10·2 answers
  • The price of pie increases. Some people who purchased pie before the price increase no longer purchase pie. This is A. a negativ
    9·1 answer
  • 2. At overtime rate $80,000 3. Total earnings ? Deductions: 4. Social security tax 32,400 5. Medicare tax 8,100 6. Income tax wi
    12·1 answer
  • Jonathan recently sold his home and was able to take home $423,000 after paying the real estate broker's commission of 6%. If th
    6·1 answer
  • Britney, a teenager, starts her own business of selling cupcakes to coffee shops and restaurants. she strives to increase either
    15·1 answer
  • For​ 2018, Winters Manufacturing uses machineminushours as the only overhead costminusallocation base. The direct cost rate is $
    11·1 answer
  • In ________ organizational cultures, more individuality is shown through the organization’s rules being less strictly applied.
    8·1 answer
  • Waterway Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere a
    14·1 answer
  • a system of shared beliefs and values that develops within an organization and guides the behavior of its members is called orga
    8·1 answer
  • 1.1  Basic terminologies in agricultural accounting 1.2   Recognition and measurement of agricultural produces 1.3   Reporting a
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!