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
bearhunter [10]
3 years ago
6

How would you value a 1000 bond with 10% coupon rate?

Business
1 answer:
andreev551 [17]3 years ago
3 0

Question

<em>How would you value a 1000 bond with 10% coupon rate?</em>

<em>Assuming the bonds is repayable in five (5) years time with a yield of 11% per annum.</em>

Answer:

Value of bond = $948.54

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 of the can be worked out as follows:  

Step 1  

<em>PV of interest payments </em>

<em> </em>Annul interest payment<em>  </em>= 10% × 1000  = 100  

Annual yield = 11%

Total period to maturity (in years)  = 8 years  

PV of interest =  

100 × (1- 1.11^(-8)/)/ 0.11 =  514.612  

Step 2  

<em>PV of Redemption Value</em>  

= 1,000 × (1.11)^(-8) = 433.926

Step 3

<em>Price of bond </em>  

= 514.612 +  433.926  =  948.539

Value of bond = $948.54

You might be interested in
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One
arsen [322]

Answer:

$4,000

Explanation:

Implicit cost is the cost which is an income foregone internally, that is not the exact opportunity cost, here opportunity cost is salary foregone, that is $60,000.

But implicit cost would be $4,000 if the financial assets are now used in business, and are not left as they are.

Implicit cost is internally generated opportunity cost.

Since here he outlays, $8,000 let us say these were used earlier as financial assets to generate revenue, now $4,000 would be considered as implicit cost, that is earlier generated revenue from internal funds.

Final Answer

$4,000

5 0
3 years ago
Cheryl's Cookies has decided to create a charity that ships cookies to soldiers stationed in Syria. The soldiers could request t
Bess [88]

Answer: Option B : Accessible

Explanation: The segment might not be accessible because of the inability to deliver the cookies in war zones as this area cannot accommodate most delivery forms.

7 0
3 years ago
Active trading in markets and competition among securities analysts helps ensure that: I. Security prices approach informational
Anika [276]

Answer:

The answer is: All the options are correct (I, II and III)

Explanation:

The larger the number of individuals (e.g. securities analysts, investors) who are informed about the price system of securities, the prices of securities will approach informational efficiency.

When the system approaches informational efficiency, you can determine which securities are riskier than others. Therefore you can price riskier securities so that they offer higher expected returns.

The other positive effect of informational efficacy is that investors can determine which securities are undervalued or overvalued.

8 0
3 years ago
A cylindrical can that has a capacity of 20 m3 will be made. The metal used to build the top costs $10 per square meter while th
Alchen [17]

The dimensions of the cylinder can be used to minimise cost of manufacture.

<h3>How to we find minimised cost?</h3>

Let's ignore the metal's thickness and assume that the material cost to manufacture is precisely proportionate to the surface area of a perfect cylinder.

A=2πr(r+h)

Given that V=1000=r2h and h=1000=r2, we can write

A=2πr(r+1000πr2)

A=2πr2+2000r−1

By setting the derivative to zero, we may determine the value of r that minimises A:

A′=4πr−2000r−2

0=4πr−2000r−2

2000r−2=4πr

2000=4πr3

r=500π−−−√3

r=5.419 + cm

h=1000πr2=10.838 + cm

The can with the smallest surface area has a volume of 1000 cm 3 and measures 5.419+ cm in radius and 10.838+ cm in height. The can has a surface area of 553.58 cm 2. Given a constant volume, the cylinder with diameter equal to height has the least surface area.

Can surface area (cm2) versus. radius (cm), where capacity = 1000cm 3.

Learn more about manufacturing here:

brainly.com/question/17111259

#SPJ4

8 0
1 year ago
2. "Because corporations do not actually raise any funds in secondary markets, secondary markets are less important to the econo
gladu [14]

Explanation:

I disagree with this argument, it can be said that the secondary market is equally or more important than the primary market, due to the fact that it is the secondary markets that determine what will be the prices that the companies that issue bonds will sell in the primary market.

Secondary markets can also be considered to be responsible for making securities easier to sell in the primary market due to their greater liquidity.

4 0
3 years ago
Other questions:
  • A new accountant at Marin Inc. is trying to identify which of the amounts shown below should be reported as the current asset "C
    10·1 answer
  • A pension fund that begins with $500,000 earns 15% the first year and 10% the second year. At the beginning of the second year,
    15·1 answer
  • Using ABC in a service company
    12·1 answer
  • Select the FALSE statement from below:
    5·2 answers
  • When senators decide it is time to vote on a bill, they begin a procedure called a __________ to indicate the time for discussio
    15·2 answers
  • Give an example of both impression management and face-work from your daily life. For example, if you go on a first date or a jo
    15·1 answer
  • River City Recycling just paid its annual dividend of $1.15 per share. The required return is 12.3 percent and the dividend grow
    7·1 answer
  • Allo Foundation, a tax-exempt organization, invested $200,000 in cost-saving equipment. The equipment has a five-year useful lif
    10·1 answer
  • A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised
    9·1 answer
  • What is the primary purpose of a trading bloc? (5 points) group of answer choices to foster political and social unity to lower
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!