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suter [353]
3 years ago
5

Suppose that you read in The Wall Street Journal that a bond has a coupon rate of 9 percent, a price of 71 3/8, and pays interes

t annually. Rounded to the nearest whole percent, what would be the bond's "current" yield
Business
1 answer:
olga nikolaevna [1]3 years ago
8 0

Answer:

This question is missing the options given below:

A. 11%

B.13%

C. 15%

D. 17%

E. 20%

The correct answer is option B,the bond current yield is 13%

Explanation:

Bonds Current Yield = Year one cash flow / Current  Price x 100 = 9 / 71.375 x 100 = 12.60% or approximately 13%

Note that 71 3/8 is the same as 71.375% as 3/8 gives 0.375 and when added to 71% gives 71.375%

The year cash flow is calculated as :9% of bond par value($100)=$9

You might be interested in
All of these are functions of money EXCEPT :________
tino4ka555 [31]

Answer:

c

Explanation:

it doesn't make sense to be a function of money

8 0
2 years ago
The Gorman Group issued $970,000 of 13% bonds on June 30, 2021, for $1,042,973. The bonds were dated on June 30 and mature on Ju
omeli [17]

Answer:

Entries are given below

Explanation:

Cash should be recorded as an asset on the issuance of bonds and bonds should be credited as it is a liability for the company. Interest expense should be debited on a semiannual basis

June 30, 2021 ( issuance of bonds)

                                                          DEBIT          CREDIT

Cash                                                 1,042,973

Bonds payable                                                     970,000

Premium on bonds payable                                 72,973

December 31, 2021 ( interest expense)

                                                            DEBIT          CREDIT

Interest Expense                               62,578

(1,042,973 x 12% x 6/12)

Premium on bonds payable               472    

Cash                                                                          63,050

(970,000 x 13% x 6/12)

June 30, 2022 (interest expense)

                                                           DEBIT            CREDIT

Interest Expense                               62,550

(1,042,973-472) x 12% x 6/12)

Premium on bonds payable               500    

Cash                                                                             63,050

(970,000 x 13% x 6/12)

5 0
3 years ago
Three Corners Markets paid an annual dividend of $1.42 a share last month. Today, the company announced that future dividends wi
Mariana [72]

Answer:

$10.82%

Explanation:

The computation of stock value is shown below:-

First we need to find out the expected dividend for computing the stock value

So, Expected dividend = $1.42 × (1 + 1.3%)

= $1.44

Now, Stock value = Expected dividend ÷ (Required return - Growth rate)

= $1.44 ÷ (14.6% - 1.3%)

= $1.44 ÷ 13.3%

= $10.82%

So, for computing the stock value we simply applied the above formula.

3 0
3 years ago
Community hospital just hired a contrast coder who charges $5.00 per record coded. Last week she coded 300 records. The HIM mana
VLD [36.1K]

Answer:

The contrast coder's weekly salary last week was $450.00.

Explanation:

The CC charged $5.00 per record coded. The previous week she coded 300 records.

Write it like:

$5.00 x 300 = 1500.00

Though remember the hospital has a 30% benefit.

So:

1500.00 x 30%*=450.00

*0.30 if you can't do the % sign on the calculator

Sorry if it doesn't work out!

6 0
2 years ago
Cheyenne Corp. had the following transactions that took place during the year:I.Recorded credit sales of $2250II.Collected $1350
Degger [83]

Answer:

The correct option is d) <u>Decrease</u>.

Explanation:

Free cash flow (FCF) can be described as the cash that is generated by a company after cash outflows required to support operations and maintain the capital assets of the company have been accounted for.

Therefore, FCF can be calculated by adjusting for non-cash expenses, changes in working capital, and capital expenditures to reconcile net income.

The total effect of these transactions on free cash flow can be determined by first calculating the account receivable for the year as follows:

Calculation of account receivable for the year:

<u>Particular                                                     Amount ($)</u>

Credit sales                                                    2,250

Cash collected from the customer              (1,350)

Sales returns                                                <u>   (450)  </u>

Account receivable                                     <u>    450  </u>

A partial free cash flow statement can therefore be prepared as follows:

Cheyenne Corp.

Free cash flow statement (Partial)

<u>Particular                                                                   Amount ($)  </u>

Net income                                                                         xx

(Increase) decrease in non-cash current assets:

Increase in account receivable                                    <u>   (450)  </u>

Free cash flow                                                              <u>   (450)   </u>

<u />

Since the free cash flow is negative or minus $450, it therefore implies that the total effect of these transactions on free cash flow is a <u>decrease</u>.

Therefore, the correct option is d) <u>Decrease</u>.

7 0
3 years ago
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