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
Arada [10]
3 years ago
5

A 13-year bond of a firm in severe financial distress has a coupon rate of 10% and sells for $930. The firm is currently renegot

iating the debt, and it appears that the lenders will allow the firm to reduce coupon payments on the bond to one-half the originally contracted amount. The firm can handle these lower payments. What are the stated and expected yields to maturity of the bonds? The bond makes its coupon payments annually.
Business
1 answer:
adoni [48]3 years ago
3 0

Answer:

Stated yield is 11.04%

expected yield is  5.78%

Explanation:

The expected yield to maturity can be computed using the rate formula in excel which is given below:

=rate(nper,pmt,-pv,fv)

nper is the number of coupon interest the bond would pay which is 13

pmt is the amount of coupon interest the bond pays which is $1000*10%=$100

pv is the current price of the bond which is $930

fv is the face value of $1000

=rate(13,100,-930,1000)=11.04%

However the expected yield has the coupon interest reduced to one -half as calculated below:

=rate(13,100*0.5,-930,1000)=5.78%

You might be interested in
What is the Current Ratio given the following information?
azamat

Answer:

The correct option is B that is 0.45

Explanation:

Computing the Current Ratio with the formula which is as:

Current Ratio (CR)  = Current Assets (CA) / Current Liabilities (CL)

where

Current Ratio (CA) is $477.50

Current Liabilities (CL) is $1075

Putting the values in the above formula of Current Ratio (CR):

= $477.50 / $1075

= 0.444 or 0.45

Note 1: Inventory will not be included while computing the current ratio, as it is already been added in the current assets. Therefore, there is no need of adding it twice in the Assets.

Note 2: This is the correct formula for computing the current ratio and I computed the same with the given information, so it 0.45 is the correct answer.

8 0
3 years ago
Read 2 more answers
The following data was collected from the manufacturing of an auto component. It represents the diameter (in mm) of that compone
andre [41]

Answer:

9.37

Explanation:

The computation of LCL for a control chart is shown below:-

Sample  Obs 1  Obs 2    Obs 3   Obs 4   Mean observation    Range

1                 10      12           12          14              12                         4

2                 12     11            13          16              13                          5

3                 11      13            14           14              13                          3

4                 11       10            7            8               9                          4

5                13     12             14            13             13                         2

For computing the mean observation  and range we will use the below formulas

Mean observation = ( Obs 1 + Obs 2 + Obs 3 + Obs 4) ÷ 4

Range = Highest value - Lowest value

LCL =  \bar{\bar{X}} - A2 \bar{R}

\bar X =  ( 12 + 13 + 13 + 9 + 13 ) ÷ 5

= 12

\bar R =  ( 4 + 5 + 3 + 4 + 2 ) ÷ 5

= 3.6

Since we found the value of A2 with the help of constants table for control charts for a 4 subgroup size.

A2  = 0.729

LCL =  \bar{\bar{X}} - A2 \bar{R}

12 - 0.729 × 3.6

= 9.37

5 0
3 years ago
When a price floor is placed on the price of movie tickets, the consumer surplus relative to the free market equilibrium will mo
Lostsunrise [7]
It will definitely decrease, as consumers will have to pay more and a deadweight loss will be present. Search up 'price floors and deadweight loss'.
4 0
3 years ago
Read 2 more answers
Management of Mcgibboney Corporation has asked your help as an intern in preparing some key reports for November. The beginning
harkovskaia [24]

Answer:

$87,000

Explanation:

Calculation of the conversion cost for November.

Conversion cost can be defined as the combination of both direct labor costs and manufacturing overhead costs that are vital to help convert raw materials into product.

Using this formula

Total Conversion cost = Direct labor cost + Manufacturing overhead cost

Hence,

Direct labor cost $25,000

Add Manufacturing overhead cost $62,000

Total Conversion cost $87,000

Therefore the conversion cost for November is $87,000

4 0
3 years ago
which region gained the most from the exchanges of ideas and technologies facilitated by the mongol empire?
faust18 [17]

Answer:

Europe

........

3 0
2 years ago
Read 2 more answers
Other questions:
  • What is the top priority of dang udin soto, the street vendor?
    8·2 answers
  • You observe the following information regarding Companies X and Y: ∙ Company X has a higher expected return than Company Y. ∙ Co
    7·1 answer
  • Elegant Decor Company's management is trying to decide whether to eliminate Department 200, which has produced losses or low pro
    8·1 answer
  • If the “exact” terms of the listing agreement are met, the listing broker is entitled to a commission, even if the:
    8·1 answer
  • Suppose your favorite sports team is losing by an insurmountable score. What does the shutdown condition suggest the team should
    10·1 answer
  • Is it possible for a country to have a comparative advantage in producing a good without also having an absolute​ advantage? A c
    15·1 answer
  • The Chief Marketing Officer of the Kimberly-Clark Company will be using a percentage of sales method to set the advertising budg
    9·1 answer
  • The equilibrium price is often called the market-clearing price because:
    8·1 answer
  • Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the fir
    7·1 answer
  • the houston metro area represents which problem that exists in creating functional mass transit systems in texas?
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!