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devlian [24]
3 years ago
8

A 20-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate of 8%. Find the bond equivalent

and effective annual yield to maturity of the bond if the bond price is $950. (Round your intermediate calculations to 4 decimal places. Round your answers to 2 decimal places.)
Business
1 answer:
iren2701 [21]3 years ago
3 0

Answer:

The bond equivalent yield to maturity = 8.52%

The effective annual yield to maturity of the bond = 8.71%

Explanation:

Here, we start with calculating the yield to maturity YTM using the financial calculator

To find the YTM, we need to put the following values in the financial calculator:

N = 20*2 = 40;

PV = -950;

PMT = [8%/2]*1000 = 40;

FV = 1000;

Press CPT, then I/Y, which gives us 4.26

So, Periodic Rate = 4.26%

Bond equivalent yield = Periodic Rate * No. of compounding periods in a year

= 4.26% * 2 = 8.52%

effective annual yield rate = [1 + Periodic Rate]^(No. of compounding periods in a year) - 1

= [1 + 0.0426]^2 - 1 = 1.0871 - 1 = 0.0871, or 8.71%

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Answer: A supply schedule is a table that shows the quantity supplied at different prices in the market. A supply curve shows the relationship between quantity supplied and price on a graph.

Explanation: I HOPED THAT HELPED,!

4 0
3 years ago
The journal entry to record the purchase of materials on account in process cost accounting is a(n): Multiple choice question. i
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The journal entry to record the purchase of materials on account in process cost accounting is an Increase in assets and an increase in liabilities. Option A. This is further explained below.

<h3>What is a journal entry?</h3>

Generally, In process cost accounting, a rise in assets and an increase in liabilities are recorded in the journal entry for the purchase of materials on account.

In conclusion, A journal entry is a kind of entry that is used in the accounting records of a company to record a transaction that occurred inside the company.

Read more about the journal entry

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7 0
2 years ago
A municipal issuer official has lost her re-election campaign and has just left elected office. She is soliciting political cont
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Answer: Because the issuer official no longer holds elected office, the contribution limits of Rule G-37 do not apply.

Explanation:

Rule G-37 is a way to ensure that Municipal Issuers are not unduly influenced by those who donated to their campaigns to get into a position to become Municipal Issuers.

It prohibites for 2 years, Municipal Finance Professionals (MFP) amongst others from engaging in municipal securities business with a Municipal issuer.

An exception however, is that if the MFP is entitled to a vote for the Official in question, they can donate no more than $250 per election.

Seeing as the Municipal Issuer Officer has lost her position, the MFP need not worry about this $250 limit as it no longer applies to her. The MFP is free to donate $500 to the "clean-up" campaign.

5 0
3 years ago
Shawn starts a business called valuecentral.com, the concept takes off, and the company has an ipo and goes public. the company
tensa zangetsu [6.8K]
In such a case Shawn's company cannot and should not give out a dividend.

Since the company has just raised money, is growing and profitable and it is becoming hard to keep up with demand, this is the best time for the company to reinvest its profits to:

1. Hire more people/Buy more product

2. Improve processes

3. Use the profits to invest in R&D

4. Use the profits to invest in marketing and promotion

5. Invest in providing better customer service

So no dividend should be given since it can hamper the growth of a young company. The money should be used to grow the company for now and in the future all shareholders can enjoy good dividends.




8 0
3 years ago
The ledger of Rios Company contains the following balances after adjustments: Retained Earnings $30,000; Dividends $2,000; Servi
ch4aika [34]

Answer:

Service Revenue 50,000 debit

    Income summary  50,000 credit

--to close revenues accounts--

Income summary        34,000 debit

  Salaries and Wages Expense 27,000 credit

  Supplies Expense                      7,000 credit

--to close expenses accounts--

Income summary        2,000 debit

  Dividends                          2,000 credit

--to close dividends account--

Income summary       14,000 debit

  Retained Earnings          14,000 credit

Explanation:

To close the temporary accounts which are, revenues, expenses and dividends we will use an auxiliary account called Income Summary

Then, once all are closed we transfer their balance into retained earnings:

  Income summary

DEBIT           CREDIT

                    50,000

34,000

<u>  2,000                          </u>

       Balance 14,000

7 0
3 years ago
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