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
Alona [7]
3 years ago
7

Morgan would like to purchase a bond that has a par value of $1,000, pays $80 at the end of each year in coupon payments, and ha

s 10 years remaining until maturity. If the prevailing annualized yield on other bonds with similar characteristics is 6 percent, how much will Morgan pay for the bond
Business
1 answer:
dybincka [34]3 years ago
6 0

Answer:

Price of Bond =  $1,147.201

Explanation:

The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).  

Value of Bond = PV of interest + PV of RV  

The value of bond for Morgan can be worked out as follows:

Step 1  

<em>PV of interest payments  </em>

PV of interest =  

A × (1+r)^(-n)/r

A- interest payment- 80, r-yield on bond- 6%, n-years to maturity- 10

80 × (1- (1.06)^(-10)

= 588.8069

Step 2  

<em>PV of Redemption Value  </em>

= 1,000 × (1.06)^(-10)  

= 558.3947769

Price of bond  

=  588.80 + 558.394

Price of Bond =  $1,147.201

You might be interested in
A company reports the amounts below in its financial statements. Net cash flow from operating activities $37,570 Total net cash
balandron [24]

Answer:

Ratio will be 0.92

So option (A) will be the correct option

Explanation:

We have given net cash flow from operating activities = $37570

So net operating cash flow = $37570

Current liabilities at the bugging of the year = $38400

Current liabilities at the end of the year = $43200

So average current liabilities =\frac{38400+43200}{2}=$40800

We have to find the ratio of operating cash flow to current liabilities

So ratio will be =\frac{37570}{40800}=0.92

So option (A) will be the correct option

3 0
3 years ago
I got some answers here on brainly and all of your answers were wrong?
cricket20 [7]

Answer:

LOL BRO Thats how I be sometimes

4 0
2 years ago
Which of the following situations leads to an unplanned increase in inventories of $2.0 trillion? A. real GDP = $5.0 trillion an
timama [110]

Answer: C. real GDP = $6.0 trillion and aggregate planned expenditures = $4.0 trillion

Explanation:

Unplanned Inventory arises when Real GDP is larger than Planned Expenditure because it must satisfy the below formula,

Real GDP = Planned + Unplanned expenditure

For Option C,

Real GDP = 6.0 trillion,

Planned expenditure = 4.0 trillion

Unplanned Expenditure = Real GDP - Planned Expenditure

= $6.0 trillion - $4.0 trillion

= $2.0 trillion

Therefore Option C is correct as it led to a $2.0 trillion increase in Expenditure which translates to inventory.

5 0
3 years ago
Which loan type requires you to make loan payments while you’re attending school?
Zolol [24]
D?but not sure.......

4 0
3 years ago
Read 2 more answers
Peter has $50 to buy towels. The store has two brands: one set costing $30 and another set, of nicer quality, costing $45. He de
never [62]
<span><span>He already plans to spend $50 to buy towels and since both sets of towels cost less than $50 he decided to go with the better quality yet more expensive set of towels.</span>
</span>
7 0
3 years ago
Other questions:
  • A share of preferred stock for Marshall Manufacturing currently sells for $120. It offers the investor a dividend rate of 8%, on
    14·1 answer
  • Put these decisions in the correct order
    7·1 answer
  • The local government uses property taxes to pay for goods and services in the community. true or false
    12·2 answers
  • ‍You have just decided to add a new line to you manufacturing plant. Compute the expected loss/profit from the addition if you e
    7·1 answer
  • An investor buys 100 shares of walmart at $45 per share on margin with an initial margin of 70% and a maintenance margin of 25%.
    10·1 answer
  • Which of the following is the last step in creating a budget?
    8·2 answers
  • When a bond is sold at a​ discount, the maturity value is less than the present value of the principal and interest​ payments, b
    11·1 answer
  • Considering the entire organization's operational efficiency is critical in coordinating international business activities, so g
    11·1 answer
  • A common theme in the Asian culture is the emphasis on harmony and collectivism, as a result, the ________ form of decision maki
    5·1 answer
  • When should an Accountant user use the Write Off tool in QuickBooks Online?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!