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
3241004551 [841]
4 years ago
11

excel Carie Company issues bonds due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest paymen

ts are made semi-annually. The market rate for this type of bond is 5%. Using a financial calculator or Excel, what is the issue price of the bonds
Business
1 answer:
Musya8 [376]4 years ago
3 0

Answer:

$ 538,972.91

Explanation:

The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate

Value of Bond = PV of interest + PV of RV

The value of bond for Carie Company can be worked out as follows:

Step 1

PV of interest payments

PV = A × (1+r)^(-n)/r

A-semi annul interest payment:

= 6% × 500,000× 1/2 = 15,000

r-Semi annul yield = 5%/2 = 2.5%

n-Maturity period = 10× 2 = 20

PV of interest payment:

=15,000× (1- (1+0.025)^(-20)/0.025)

=   233,837.43

Step 2

PV of Redemption Value

= 500,000× (1.025)^(-20)

=305,135.4714

Step 3

Price of bond

= 233,837.43  + 305,135.4714

=$ 538,972.91

You might be interested in
What are the advantages and disadvantages of common stocks​
andrey2020 [161]

Advantages:

  • You can invest in companies with limited liability.
  • Common stocks offer a higher earning potential.
  • You can easily purchase common stock on virtually any trading platform.
  • Common stocks can provide dividends.
  • You’ll get to take advantage of a growing economy.

Disadvantages:

  • You are the last person to get paid during a company liquidation.
  • You don’t have much control over your investment.
  • Companies are not required to pay dividends on common stocks.
  • It can take time to generate significant gains.
  • You will face high levels of professional competition when investing in common stocks.

Hopes this helps :)

5 0
3 years ago
Dylan applies for a position with Electrical Works LLC. Dylan’s previous employer, Federal Circuits Inc., gives Electrical Works
tatuchka [14]

Answer:

The correct answer is D

Explanation:

Defamation is the term which states that the statement is false of the fact which exposes a person to contempt, injures him in business or trade, ridicule or hatred.

In this case, Dylan who applies for the position with the Electrical Works and the previous employer gives the company a review which involve negative statements which Federal Circuits know it is untrue.

So, this is defamation, it is by passing a false and negative statement which harm one's professional reputation.

7 0
3 years ago
Manny and Irene will be retiring in fifteen years and would like to buy a Mexican villa. The villa costs​ $500,000 today, and ho
ki77a [65]

Answer:

Annual deposit= $37,714.37

Explanation:

Giving the following information:

The villa costs​ $500,000 today, and housing prices in Mexico are expected to increase by​ 6% per year. Manny and Irene want to make fifteen equal annual payments into an​ account, starting​ today, so there will be enough money to purchase the villa in fifteen years.

The account earns​ 10% per​ year.

First, we need to calculate the final value of the house with the following formula.

FV= PV*(1+i)^n

FV= 500,000*(1.06^15)=$1,198,279.1

Now, we can calculate the annual payments required:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (1,198,279.1*0.10)/[(1.10^15)-1]

A= $37,714.37

6 0
4 years ago
The difference between nominal GDP and real GDP is that:
Elenna [48]

Answer:

a. real GDP adjusts the value of goods for changes in the price level and nominal GDP does not.

Explanation:

The nominal GDP is calculated by using current prices without adjusting the inflation factor int the prices of goods that are accounted for in the total GDP value. On the other hand the real GDP is calculated by adjusting inflation int he pricesof the goods which included in total GDP value. So the correct option is a. real GDP adjusts the value of goods for changes in the price level and nominal GDP does not.

4 0
3 years ago
Share your idea for an entrepreneurial business venture.
devlian [24]

Answer:

Entrepreneurial Ventures. ... Small businesses usually deal with known and established products and services, while entrepreneurial ventures focus on new, innovative offerings. Because of this, small business owners tend to deal with known risks and entrepreneurs face unknown risks.

3 0
3 years ago
Read 2 more answers
Other questions:
  • Swift also proposed these five real solutions: taxing absentee landlords reducing the attitude of wastefulness reducing the desi
    11·2 answers
  • Historically, if an organization and employee do not have a specific employment contract, the employer or employee may not requi
    11·1 answer
  • The broadest information set is included in the _____.A. weak-form efficiency argumentB. semistrong-form efficiency argumentC. s
    14·1 answer
  • The type of listing that assures a broker of compensation for procuring a customer, regardless of the procuring party, is an:___
    13·1 answer
  • What is dumping?
    12·2 answers
  • Whats the difference between financial planning and financial goals
    12·1 answer
  • Scarcity is the mother of economics.discuss​
    14·1 answer
  • Consider a 10-year bond with a face value of $1000 that has a coupon rate of 5.5%, with semiannual payments. a. What is the coup
    5·1 answer
  • Isaiah is a Financial Quantitative Analyst for a major stock investment company. What does Isaiah do on a daily basis as a part
    10·2 answers
  • Ahkem is considering buying a new car. He has narrowed his choices down to two models. On a sheet of paper, he begins writing do
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!