SOMEONE PLEASE HELP ME WITH THIS

Suppose a bond with a 10% coupon rate and semiannual coupons, has a face value of $1,000, 20 years to maturity and is selling fo

NikAS [45]

Answer:

The YTM is less than 10%

Explanation:

If a coupon rate of a bond is greater than its yield to maturity (YTM), the bond is said to trade at a premium. The Bond's current price would be greater than its Face value

If a coupon rate of a bond is less than its yield to maturity (YTM), the bond is said to trade at a discount. The bonds current price would be less than its face value

In this Question, the bond's current price ($1,197.93) is greater than its face

($1,000) which means that the bond is trading at a premium. Therefore, we can conclude that the bond's YTM is less than its coupon payment. In this question the coupon rate is 10%, therefore the YTM should be less than 10%.

8 0

3 years ago

Which is the new crime created by Sarbanes-Oxley? a. mail fraud b. obstruction of justice c. certification of false financial st

meriva

Answer:

The correct answer is letter "C": certification of false financial statements.

Explanation:

The Sarbanes-Oxley Act (SOX) is a statute that aims to increase corporate governance and enhance internal control of companies. SOX's primary purpose is to protect stakeholders from false corporate financial statement representations. Investors must know that the financial information on which they rely is accurate and that their accuracy has been checked by an independent third party.

<em>Altering, destroying, covering-up or falsifying information in the financial statements of a firm is considered a crime since the SOX implementation with a maximum sentence of 20 years.</em>

3 0

2 years ago

You bought one of Great White Shark Repellant Co.’s 5.8 percent coupon bonds one year ago for $1,030. These bonds make annual pa

defon

Answer:

total rate of return on the Bond = 9.40%

Explanation:

given data

coupon bonds = 5.8%

bonds price = $1,030

maturity time = 14 year

required return on the bonds = 5.1 percent

solution

we know here market price of the bond is Present Value of Coupon Payments + Present face Value

so that face Valueof bond = $1,000

and here annual Coupon Amount will be

annual coupon amount = $1000 × 5.80%

annual coupon amount = $58

and here Market Price of the Bond will be

Market Price of Bond = Present Value of Coupon Payments + Present face Value ......................1

here Present Value of Coupon Payments at PVIFA 5.10% and 14 Years

Present Value Annuity Inflow Factor (PVIFA) = $\frac{1-(1/(1+r)^t}{r}$ ....2

Present Value Annuity Inflow Factor = $\frac{1-(1/(1+0.0510)^14}{0.0510}$

Present Value Annuity Inflow Factor = 9.83566

and

Present Value Inflow Factor (PVIF) 5.10%, 14 Years= $\frac{1}{(1+r)^t}$ ...........3

Present Value Inflow Factor (PVIF) = $\frac{1}{(1+0.0510)^14}$

Present Value Inflow Factor = 0.49838

so

Market Price of Bond = ( $58 × 9.83566 ) + ( $1,000 × 0.49838 )

Market Price of Bond = $1,068.85

so total rate of return on the Bond will be

total rate of return on the Bond = [ { Annual Coupon Amount + ( Change in Bond Price ) } ÷ Current Price] ...............4

total rate of return on the Bond = $\frac{58+(1068.85-1030)}{1030}$

total rate of return on the Bond = 9.40%

5 0

3 years ago

Adam’s Computer Shop had the following transactions last week. Record the general journal below.

Setler [38]

Answer:

Oct 1

Dr Supplies $620

Cr Accounts Payable $620

Oct 6

Dr Cash $350

Cr Fees Earned $350

Octd 7

Dr Equipment $2500

Cr Cash$900

Cr Accounts Payable $1400

Oct 9

Dr Accounts Payable $620

Cr Cash $620

Explanation:

Preparation of the journal entries

Oct 1

Dr Supplies $620

Cr Accounts Payable $620

Oct 6

Dr Cash $350

Cr Fees Earned $350

Octd 7

Dr Equipment $2500

Cr Cash$900

Cr Accounts Payable $1400

($2,500-$900)

Oct 9

Dr Accounts Payable $620

Cr Cash $620

4 0

3 years ago

Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: D1 = $1.25; P0 = $27.50;

lubasha [3.4K]

Answer:

B. 9.84%

Explanation:

Given that

D1 = 1.25

P0 = 27.50

g = 5%

F = 6%

Recall that

Cost of equity raised = (D1/P0 - [F × P0]) + g

Thus,

= 1.25/27.50 - [0.06 × 27.50] + 0.05

= 1.25/ 25.85 + 0.05

= 0.04835 + 0.05

= 0.09835

= 0.0984

=9.84%

8 0

3 years ago

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