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
Sidana [21]
2 years ago
9

Taussig Corp.'s bonds currently sell for $1,150. They have a 6.35% annual coupon rate and a 20-year maturity, but they can be ca

lled in 5 years at $1,067.50. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Under these conditions, what rate of return should an investor expect to earn if he or she purchases these bonds?

Business
1 answer:
mojhsa [17]2 years ago
7 0

Answer:

4.20%

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.  

The NPER represents the time period.  

Given that,  

Present value = $1,150

Future value = $1,067.50

Assuming Par value  = $1,000

PMT = 1,000 × 6.35% = $63.50

NPER = 5 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this, the rate of return is 4.20%

You might be interested in
Tevebaugh Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied over
amm1812

Answer:

c

Explanation:

8 0
3 years ago
Interest is the cost of borrowing. <br> a. True<br> b. False
Gnesinka [82]
Interest is defined as the amount paid regularly at an agreed rate for the use of money lent. Depending on the agreement of both parties, interest is for the delayed repayment of a debt. So, to answer the question above: True.
8 0
3 years ago
Amateurs who cash bad checks because of some financial crisis but have little identification with a criminal subculture are call
torisob [31]

Amateurs who cash bad checks because of some financial crisis but have little identification with a criminal subculture are called naive check forger. Forgery is defined by general or common law as the fraudulent execution of a legal document, which entails liability.

The term "naive forgery" was created to describe forgeries carried out by people with no prior criminal history and no prior contact or interaction with offenders. It is intended to exclude forgeries that are committed as a byproduct of other crimes and forgeries that are either the initial or later stages of a criminal career. Forgeries of the kinds that have been eradicated sometimes occur when criminals enter a business office and discover a drawer full of checks, which they frequently — and foolishly — cash.

The forgeries produced by embezzlers and occasionally by con artists are also excluded, mostly because they serve as a byproduct or a secondary method of committing their crimes. The fact that the embezzler was in a position of trust further sets him apart from the forger. On the grounds that it unnecessarily restricts the range of crimes and hence lessens the effectiveness of our generalisations, the legitimacy of how we define the class of forgeries about which we attempt to generalise may be questioned. The nature of the prior records of individuals found guilty of forgery will provide the answer to any such question we may have.

Learn more about Liability here brainly.com/question/14921529

#SPJ4

4 0
1 year ago
Is income debit or credit
Vanyuwa [196]

Answer:

income is credit thats the amswer

5 0
2 years ago
Read 2 more answers
Marble Construction estimates that its WACC is 10 percent ifequity comes from retained earnings. However, if the company issuesn
dedylja [7]

Answer:

Projects E,F and G should NOT be considered.

Optimal Capital  is $5,750,000

Explanation:

The accept-or-reject rule, using the IRR method, is to acceptthe project if its Internal Rate of Return (IRR) is higher than theWeighted Average Cost of Capital(k) [r>k]. The project shall berejected if its internal rate of return is e lower than theWeighted Average Cost of Capital cost of (r<k)

                                 Accept if        r>k

                                 Reject if         r<k

                                   Mayaccept if r = k

If the Weighted Average Cost of Capitl (WACC) is less than IRRrate, then the project has positive NPV; if it is equal to IRR, theproject has a Zero NPV, and if it is greater than the IRR, theproject has negative NPV.

The projects should be accepted as the rate of return on theproject is higher than the WACC(10.8%) which means that theprojects will be profitable as the returns are higher than the costof the project (capital).  Considering this projects E,F and G should NOT be considered.

And considering the sizes the Optimal Capital  is $5,750,000 (the addition of sizes of all projects)

8 0
2 years ago
Other questions:
  • The following information applies to the questions displayed below.) Waldorf Co. had the following transactions during the month
    9·1 answer
  • Keenan received a number of letters from his constituents complaining that traffic in their city is too congested. He discussed
    15·2 answers
  • Suppose you value a special watch at $100. You purchase it for $75. On your way home from class one day, you lose the watch. The
    10·1 answer
  • Suppose the government increases taxes by ​$110 billion and the marginal propensity to consume is 0.80. By how will equilibrium
    13·1 answer
  • Wages from an employer are the only source of income. true false
    15·2 answers
  • Pina Corporation factors $268,100 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen
    11·1 answer
  • During the past year, a company had cash flow to stockholders, an operating cash flow, and net capital spending of $16,497, $40,
    6·1 answer
  • Tall Guys Clothing has a 45-day collection period. Sales for the next calendar year are estimated at $2,100, $1,600, $2,500 and
    15·1 answer
  • A portfolio has 30% of its value in IBM shares and the rest in Microsoft (MSFT). The volatility of IBM and MSFT are 35% and 30%,
    11·1 answer
  • What is financial literacy and why is it important.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!