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
slega [8]
3 years ago
8

Assume that a 6 percent $500,000 bond with semiannual interest payments and a remaining life of 10 years could be purchased toda

y, when market interest rates are 4.5 percent. How much would you have to pay to buy the bond?
Business
2 answers:
aleksandr82 [10.1K]3 years ago
7 0

Answer:

$530579.03

Explanation:

Bond Value Formula

BV = C×1-(1+r/m)^-nm/r/m + FV/(1+r/m)^nm

So we need to first calculate the semi annual coupon payment

given by C = C×FV/2

                   =0.06×$500000/2

                   =$15000

Then substitute into the formula for bond value

BV = 15000 × 1 -(1+0.045/2)^-10×2 /0.045/2+ 500000/(1+0.045/2)^10×2

      =$532579.03

Lesechka [4]3 years ago
4 0

Answer:

I will pay $559,864 for this bond

Explanation:

Coupon payment = $500,000 x 6% = $30,000 annually  = $15,000 semiannually

Number of periods = 10 years x 2 = 20 period

Interest Rate = 4.5%  = 2.25% semiannually

Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula:

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond =$15,000 x [ ( 1 - ( 1 + 2.25% )^-20 ) / 2.25% ] + [ $1,000 / ( 1 + 2.25% )^20 ]

Price of the Bond = $15,000 x [ ( 1 - ( 1.0225 )^-20 ) / 0.0225 ] + [ $500,000 / ( 1.0225 )^20 ]

Price of the Bond = $239,455.68 + $320,408.24 = $559,863.92

Price of the Bond = $559,864

You might be interested in
Which of the following situations represents commodity-backed money? Choose one:
Marta_Voda [28]

Answer: A. Dollars are printed on paper and have value because the government says they have value.

Explanation: Commodity backed money is a situation where by the value of money is backed up by its purchasing power with which it can be traded with at request. The supply of many can not be more than the purchasing power the country holds.

3 0
3 years ago
Maria plans to leave her estate to her brother, Juan. Juan has become Maria's
Kipish [7]
A is your answer hope this helps
5 0
2 years ago
The growth-share matrix defines four types of sbus: __________ are low-growth, high-share businesses or products.
mafiozo [28]

The growth-share matrix defines four types of sbus: Cash cows are low-growth, high-share businesses or products.

Each of the four quadrants represents a particular combination of relative market share, and growth: Low Growth, High Share High Growth, High Share. Stars are high-growth, high –share businesses or products.

They often need heavy investments to finance their zoom. The market rate varies from industry to industry but usually shows a cut-off point of 10% – growth rates more than 10% are considered high, while growth rates below 10% are considered low.

Low market share business is a smaller amount than half the industry leader's share, and successful companies are those whose five-year average return on equity surpasses the industry median.

Growth-share business matrix may be a business tool, which uses relative market share and industry rate of growth factors to guage the potential of business brand portfolio and suggest further investment strategies.

The BCG matrix relies on Industry rate and relative market share. BCG matrix may be a framework created by Boston Consulting Group to guage the strategic position of the business brand portfolio and its potential.

learn more about share business: brainly.com/question/24448358

#SPJ4

8 0
2 years ago
Gerard is a mid-level manager who believes that people do not like to work and try to avoid it. He therefore controls, directs,
liq [111]

Answer:

The correct answer is c. McGregor's Theory X.

Explanation:

Theory X is defined by Douglas McGregor in his 1960s book "The Human Side of Enterprise" as an <em>authoritarian</em> style of management. In the book, McGregor explains that styles of management are greatly influenced by how the manager views people. Theory X is based on the view that workers are inherently lazy and unmotivated, prefer to be directed, do not like to take responsibility and dislike to work in general. In this style of management, it is assumed that the only way to push employees to work is to provide them with incentives or punishments, according to their performance. Also, authority is centralized on a select few and employees are strictly controlled and supervised.

In this particular case, Gerard fits the Theory X style of management, as he coerces and threatens employees to push them to do their jobs. He has the belief that people don't like to work and avoid it.

6 0
3 years ago
If the accountant forgets to adjust the Prepaid Expenses account, there will be:_____
ivann1987 [24]

Answer:

Option B, an overstatement of net income, is the right answer.

Explanation:

Option “B” is correct because when the prepaid expenses occur then it is recorded in the balance sheet on the asset side and the cash will be reduced by the same amount. However, if the prepaid expenses have not been adjusted then it will show the overstatement of net income because cash has been gone so actual cash will be lower than the recoded cash. Thus, option B is right.

7 0
3 years ago
Other questions:
  • Debit postings to the individual accounts in an accounts receivable subsidiary ledger generally come from the
    10·1 answer
  • A private oil company is embarking on a joint pipeline project with the government. Which type of network will they set up for p
    14·2 answers
  • A market-penetration pricing strategy is most suitable when Answer . A) a low price slows down market growth B) production and d
    8·1 answer
  • This problem has been solved!
    12·1 answer
  • To assess the current value of a lump-sum retirement benefit that will be received in 10 years, use the __________ calculation.
    8·1 answer
  • 6. The split-level home is a variation of the
    11·2 answers
  • A city government purchased a new fire truck in Year 1 for $270,000. The city incurred an additional $ 30,000 in transportation
    5·1 answer
  • The first step in the process of creating a marketing plan is to
    14·2 answers
  • You sell one December futures contracts when the futures price is $1,010 per unit. Each contract is on 100 units and the initial
    6·1 answer
  • What is innovation? (Media Literacy)
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!