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
AlexFokin [52]
3 years ago
7

What would be the value of the bond described in Part d if, just after it had been issued, the expected inflation rate rose by 3

percentage points, causing investors to require a 13% return? Would we now have a discount or a premium bond?
Business
1 answer:
kolbaska11 [484]3 years ago
3 0

Answer:

The value of bond is $837.213, the bond is a discount bond

Explanation:

Solution

Given that

The Rate of return is 13% which is higher than the  coupon rate.

What this suggest is that the investors anticipates a return that is higher when compared to return supplied by bonds. thus, the bond value we decrease and it becomes a discount bond.

Now,

The bond value is given below:

Bond value = [Coupon rate in year 1 / ( 1 + Investor return )1 + Coupon rate in year 2 / ( 1 + Investor return )2 + Coupon rate in year n / ( 1 + Investor return )n ] +  Par value / ( 1 + investor return )n

Thus,

= [ $100 / (1 + 0.13)1 + $100 / ( 1 + 0.13)2... $100 / ( 1 + 0.13)10 ] + $1000 / ( 1 + 0.13 )10

= $542.62 + 294.58

= $837.21

Value of bond will be = $837.213

You might be interested in
Barney hendricks is interviewing web developers for his company. over lunch, he tells you that his top candidate showed lots of
anastassius [24]
Barney appears to be very impressed by the candidate's non-verbal communication skills.
8 0
3 years ago
Read 2 more answers
Which part of the passage hints at Helen's efforts of ensuring visibility on social media sites?
jekas [21]

Answer: She updates her online profile regularly and participates in work related online discussions.

Explanation:

3 0
3 years ago
A calendar year corp. has substantial accumulated E&P, but it expects to incur a deficit in current E&P for the year due
Vadim26 [7]

Answer:

The statement is inaccurate.

Explanation:

Comment on the validity of this statement. LO 3 (p. 19-9).

The statement is inaccurate. When a deficit exists in current E & P and a positive balance exists in accumulated E & P, the accounts are netted at the date of distribution. If a positive balance results, the distribution is a divide to the extent of the balance. Any loss in current E & P is deemed to accrue ratably throughout the year unless the parties can show otherwise.

4 0
3 years ago
Vilas Company is considering a capital investment of $190,100 in additional productive facilities. The new machinery is expected
zheka24 [161]

Answer:

9.49%

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Cash flow in year 0 =  $190,100

cash flow each year from year 1 to 5 =  $49,500

IRR = 9.49%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

6 0
3 years ago
Who are the households sector consist of and why is this sector a producer and consumer​
strojnjashka [21]

Answer:

The answer Is below

Explanation:

The households sector is a sector that consists of people such as consumers or end-users and entrepreneurs that are not into a corporation

Also, this sector has producers and consumer​s because consumers are the individuals that consume the goods and services produced.

Similarly, there are producers in the household sectors as some individuals produce goods and services for themselves and their immediate environment without going into a corporation. For example, Street food vendors, Cobblers, carpenters, and many more.

7 0
3 years ago
Other questions:
  • The employees at NeiFra Infosystems Inc., a website design company, have been struggling to provide quality services to clients.
    6·1 answer
  • Elka can remember the phone number she just looked up only by repeating it over and over. When she stops saying it out loud, she
    10·1 answer
  • Is it possible to make homogeneous shopping product into a heterogeneous shopping product? think about flat-panel televisions an
    7·1 answer
  • Identify the consequences of having dissatisfied employees and describe ways of applying the four theories of job satisfaction a
    12·1 answer
  • Freeman, Inc., reported net income of $40,000 for 2015. However, the company's income tax return excluded a revenue item of $3,0
    13·1 answer
  • Finding a need for a product or service on which to base a start-up business is the
    15·1 answer
  • Koczela Inc. has provided the following data for the month of May: Inventories: Beginning Ending Work in process $ 28,000 $ 23,0
    8·1 answer
  • Each of the following is an example of a fixed expense EXCEPT:
    14·1 answer
  • Project selection helps to ensure that no project affect the status of other
    14·1 answer
  • COMO CREES QUE SE PODRIA SOLUCIONAR LA POBREZA ?? POR FAVOR DOY CORONA , Y CORAZON ( E QUE NO SEPA NO ESCRIBA ) :(
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!