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
gogolik [260]
4 years ago
15

Wesimann Co. issued 12-year bonds a year ago at a coupon rate of 7.8 percent. The bonds make semiannual payments and have a par

value of $1,000. If the YTM on these bonds is 6.1 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Nesterboy [21]4 years ago
7 0

Answer:

Price of bond  =1,143.18

Explanation:

<em>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). </em>

Value of Bond = PV of interest + PV of RV

The value of bond for Wesimann Co can be worked out as follows:

Step 1  

<em>PV of interest payments </em>

Semi annul interest payment  

= 7.8% × 1000 × 1/2 = 39

Semi-annual yield = 6.1%/2 = 3.05  % per six months

Total period to maturity (in months)

= (2 × 12) = 24 periods (Note it was sold 12  years ago)

PV of interest =  

39  × (1- (1+0.0305)^(-24)/) 0.0305 = 656.94

Step 2  

<em>PV of Redemption Value</em>

= 1,000 × (1.0305)^(-24) = 486.237

Price of bond

=   656.94 +486.23 = 1,143.179

Price of bond  =1,143.18

You might be interested in
Common misconception about entrepreneurship
Y_Kistochka [10]

Answer:

1. Entrepreneurs can only be successful if they have large funding backing them.

2. Entrepreneurs have cushy hours.

3. Entrepreneurs have to do everything themselves.

5. Entrepreneurs have to take huge risks.

7. Entrepreneurs are never stressed out.

8. Entrepreneurs are all wealthy.

9. Entrepreneurs are their own boss.

10. Entrepreneurs have more personal time.

4 0
3 years ago
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses a
Ludmilka [50]

Answer:

$44,377

Explanation:

Note: The answers (options) attached this question belongs to another question

Particulars                                                             Amount

Salaries ($48,000*1,200/3,500)                           $16,457

Depreciation ($24,000*$102,600/$270,000) $9,120

Advertising ($47,000*$346,000/$865,000) <u>$18,800</u>

Total                                                                       <u>$44,377</u>

5 0
3 years ago
Tricia had $100,000 in mortgage debt forgiven through a short sale on her principal residence on her Federal income tax return.
lidiya [134]

Answer:

d) $100,000

Explanation:

In answer to this question, Tricia must include $100000 as the amount of the discharge of indebtedness from the disposition of her principal residence when when she is completing her Schedule CA for the year 2019.

We have option d, 100000 dollars as the answer because the ​amount of debt forgiven is known to be taxable.

8 0
3 years ago
Southern Hydraulic Supply is undertaking a review of their inventory policies. A typical product is a small hydraulic fitting. C
zheka24 [161]

Answer:

$418,550

Explanation:

Steps are shown below:

a. The computation of the economic order quantity is shown below:

= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}

= \sqrt{\frac{2\times \text{52,000}\times \text{\$50}}{\text{\$1.25}}}

= 2,040 units

b. The number of orders would be equal to

= Annual demand ÷ economic order quantity

= $52,000 ÷ 2,040 units

=  25.49 orders

c. The average inventory would equal to

= Economic order quantity ÷ 2

= 2040 units ÷ 2

= 1,020 units

d. The total cost of ordering cost and carrying cost equals to

Ordering cost = Number of orders × ordering cost per order

= 25.49 orders × $50

= $1,275

Carrying cost = average inventory × carrying cost per unit

= 1,020 units × $1.25

= $1,275

So, the total annual cost would be  

= Purchase cost + ordering cost + carrying cost

= $416,000 + $1,275 + $1,275

= $418,550

Purchase cost = Annual demand × cost per unit

                        = 52,000 × $8

                        = $416,000

6 0
3 years ago
For an airline, which of the following would not be an operational budget? A cash receipts budget of flying consumers. A budget
katrin [286]

Answer:

A cash receipts budget of flying consumers.

Explanation:

Operational budget is defines as all the profits and expenses a business realises as a result of planning it's operations.

Usually an operational budget is set before activities begin, and is a target to be achieved.

For an airline cash receipts of flying customers is not a revenue realised as a result of planning operations, so this is the correct answer.

However a fuel budget, material budget for parts, and labour budget for flight crew are operational budgets.

4 0
3 years ago
Read 2 more answers
Other questions:
  • When julie, the marketing executive for hope springs, determined that market segments existed with sufficient disposable income
    14·1 answer
  • All of the following developments helped make the cattle business profitable except:
    7·1 answer
  • The balance sheet shows the following accounts and amounts Inventory. $84,000, Long-term Debt 125.000; Common Stock $60,000; Acc
    6·1 answer
  • Trail Runner guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately
    10·1 answer
  • Blue corporation's standards call for 2,500 direct labor-hours to produce 1,000 units of product. during may 900 units were prod
    12·1 answer
  • Jim and Sally are not married. They lived together all year. Sally had $5,000 in earned income during 2019. Jim earned $30,000 i
    12·1 answer
  • JavaPro Systems is a​ start-up company that makes connectors for​ high-speed Internet connections. JavaPro Systems has budgeted
    7·1 answer
  • After getting her degree in marketing and working for 5 years for a large department store, Sally started her own specialty shop
    6·1 answer
  • Jennings Co. has total assets of $433.0 million. Its total liabilities are $114.5 million. Its equity is $318 million. Calculate
    14·1 answer
  • other things held constant, the lower a firm's tax rate, the more logical it is for the firm to use debt. true false
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!