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givi [52]
3 years ago
6

Arjen owns investment A and 1 bond B. The total value of his holdings is 2,607 dollars. Investment A is expected to pay annual c

ash flows to Arjen of 342.76 dollars per year with the first annual cash flow expected later today and the last annual cash flow expected in 7 years from today. Investment A has an expected return of 14.48 percent. Bond B pays semi-annual coupons, matures in 20 years, has a face value of $1000, has a coupon rate of 5.98 percent, and pays its next coupon in 6 months.
What is the yield-to-maturity for bond B? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
Business
1 answer:
EastWind [94]3 years ago
8 0

Answer:

0.0782

Explanation:

First and foremost we need to determine the price of investment A in order to ascertain the price of Bond B as well:

The price of investment A is the present value of its cash flows.

price of investment A=$342.76+$342.76/(1+14.48%)^1+$342.76/(1+14.48%)^2+$342.76/(1+14.48%)^3+$342.76/(1+14.48%)^4+$342.76/(1+14.48%)^5+$342.76/(1+14.48%)^6+$342.76/(1+14.48%)^7=$ 1,791.31  

Price of Bond=total value of holdings-price of investment A=$2,607-$1,791.31=$ 815.69  

The yield to maturity on Bond can be determined using rate formula in excel:

=rate(nper,pmt,-pv,fv)

nper is the number of coupon payments which 20*2=40

pmt is the semiannual coupon=$1000*5.98%*6/12 =$29.9

pv is the current price of $815.69

fv is the face value of $1000

=rate(40,29.9,-815.69,1000)=3.91%

Annual yield=3.91% *2=7.82%

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Assume that you are a loan officer of a bank. A local church is seeking a $4 million, 20-year loan to construct a new classroom b
n200080 [17]

Answer:

Explanation:

a.

There is little information on how funds are used or how much money is spent to manage the church. The financial statements have been prepared incorrectly.

Interpretation:

While drafting the financial accounts, the church committed many errors. The church's revenue is equivalent to its daily operations operating expenditures. They have approximately $3 million in funding assets that they do not owe any money on.  

It may be deduced that the church is attempting to preserve asymmetric information, and therefore it will be better to justify its sources of income and use of money in order to determine whether they can or they cannot pay the debt.

b.

The revenue from various channels must be detailed in the yearly report so that the loan officer may make an informed judgment.

Interpretation:

Since payments and contributions account for 90% of revenue and revenue from other sources accounts for 10%, it's surprising how the church earns money in other ways as stated on the income statement. As a result, it's important to understand what other potential revenue streams the church has before approving the loan.

c.

The officer in charge of the loan should check the church's book records to make sure and guarantee that there are no outstanding loans. This situation necessitates a thorough examination and assessment.

Interpretation:

The church has $3 million worth of equipment. The church's expenses, on the other hand, are equivalent to the church's income. As a result, it's unclear how the church acquired the equipment without taking out a loan. As a result, the church must be urged to produce a full breakdown of its expenses, which may be thoroughly and fully studied to see whether there are any financing charges that the church is attempting to hide in its yearly reports.

d.

There is no direct or primary source of income for the church. It solely makes money from charity donations.

Interpretation:

The church's only sources of income are fundraisers and charitable donations. It also doesn't possess any significant revenue streams. Because the church is attempting to conceal numerous possible pieces of information, this may be a case of micro-management by the proprietors, and so these issues should be considered by the officer in charge of the loan before accepting the loan.

8 0
3 years ago
choose a u.s.-based fortune 500 company to analyze; submit the name to be approved by the instructor. each student will analyze
natulia [17]

Fortune 500 Companies: A ranking of the 500 largest US firms, ordered by total revenues for each fiscal year, is known as the Fortune 500.  

The US Based fortune 500 company that can be selected for analysis and which has issued Outstanding Bonds is Microsoft Corporation.

Outstanding Bonds:  These are those bonds that have been already issued but have not yet matured or redeemed.

To learn more about Fortune 500 Companies, visit the following link:

brainly.com/question/14697728

#SPJ4

3 0
1 year ago
Question 13 of 20
KATRIN_1 [288]

Answer:

he answer is : He likely did not cite his research, and committed plagiarism.  Todd's manager has asked him to write a report on ways to increase safety in the warehouse. Todd used the Internet to research statistics and recommendations for improving safety in the workplace. He feels like he pulled together a really strong document and that his manager will be pleased. However, when he is called into his manager's office, his manager is concerned and tells him that he has been unethical in his work.  He likely did not cite his research, and committed plagiarism.   It is the practice of taking someone else's work or ideas and passing them off as one's own.

Explanation:

5 0
3 years ago
Keith and Dena Diem have personal property coverage with a​ $250 limit on​ currency, a​ $1,000 limit on​ jewelry, and a​ $2,500
netineya [11]

Answer:

Total Claim = $2416

Explanation:

The coverage on the currency = $250

The coverage on the jewelry = $1000

The limit on the gold, pewter, and silver = $2500

The amount that is stolen:

The amount of cash = $270

The worth of jewelry = $1734

Pewterware = $1666

The miximum coverage = 250 + 1000 + 2500 = $3750

Actual loss = 270 + 1734 + 1666 = $3670

Reimbursement amount = 250 + 1000 + 1666 = $2916

Total Claim = Total Amount Covered – Deductible  

Total Claim = $2916 - $500 = $2416

4 0
3 years ago
the common sotkc of Ubees is currently sold at $26.35 per share, and it just a divident of $1.00 last year. The flotation costs
White raven [17]

Answer:

11.06%

Explanation:

Cost of equity = (D1/Current price) + Growth rate

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Cost of equity = 0.04061 + 0.07

Cost of equity = 0.11061

Cost of equity = 11.06%

So, Ubees's cost of internal common equity is 11.06%.

7 0
3 years ago
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