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irina1246 [14]
3 years ago
15

King Noodles' bonds have a 7.5% coupon rate. Interest is paid quarterly and the bonds mature in 8 years. If the discount rate is

8%, what is the price of King Noodles' bonds?
Business
1 answer:
natima [27]3 years ago
3 0

Answer:

The price of King Noodles' bonds is $970.66

Explanation:

Coupon payment = 1000 x 7.5% = $75 per year = 75/4 = 18.75 per quarter

Number of periods = n = 8 years x 4 quarter each year = 32 quarter

Yield to maturity = 8% per year = 8% / 4 = 2% per quarter

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

Price of the Bond = $18.75 x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond =$18.75 x [ ( 1 - ( 1 + 2% )^-32 ) / 2% ] + [ $1,000 / ( 1 + 2% )^32 ]

Price of the Bond = $18.75 x [ ( 1 - ( 1.02 )^-32 ) / 0.02 ] + [ $1,000 / ( 1.02 )^32 ]

Price of the Bond = $440.03 + $530.63

Price of the Bond = $970.66

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KATRIN_1 [288]

Answer:

Operating transactions

-$5000

-$6000

-$70000

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Financing transactions

+ $300000

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Total = $330000

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-$10000

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Explanation:

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Total = -$26000

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8 0
3 years ago
In Benny v. City Car Dealership, a state supreme court held that a minor could cancel a contract for the sale of a car. Now a tr
eduard

Answer:

A

Explanation:

Allow the minor to cancel the contract

5 0
2 years ago
Read 2 more answers
Required: Accounting equation Ans: assets, capital, liabilities SE-2. You are provided the following information: i. Commencemen
Tasya [4]

Answer:

<h2> particular. l.f. Dr. rs. Cr. rs. </h2>

I) bank a/c. 1,00,00.

to capital a/c. 1,00,00

( being business started with bank balance)

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to bank a/c. 40,000

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III) BANK A/C 20,000.

TO GOODS A/C 20,000

(BEING GOODS SOLD ON CREDIT)

IV) FURNITURE A/C. 60,000.

TO BANK A/C. 60,000

(BEING FURNITURE PURCHASED ON CREDIT)

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TO FURNITURE A/C 10,000

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HOPE IT HELPS IM ALSO NOT COMPLETELY PERFECT AT IT

3 0
3 years ago
Which of these is NOT an example of discharge for cause?
Shalnov [3]

Answer:

felonious conduct?

Explanation:

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Accents Associates sells only one product, with a current selling price of $150 per unit. Variable costs are 30% of this selling
Ksju [112]

Answer:

$65,333

Explanation:

As we know,

Sales price = Variable cost + Contribution cost

Sales price = Variable cost ratio + Contribution margin ratio

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Break even sales = $65,333.

8 0
2 years ago
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