Answer:
current yield 8.2089552%
YTM = 8.05%
effective annual yield = 4.92%
Explanation:
(A)
current yield = C/P
coupon payment / market price
8.8/107.2 = 0.082089552 = 8.2089552%
(B)
![P = \frac{C}{2} \times\frac{1-(1+YTM/2)^{-2t} }{YTM/2} + \frac{CP}{(1+YTM/2)^{2t}}](https://tex.z-dn.net/?f=P%20%3D%20%5Cfrac%7BC%7D%7B2%7D%20%5Ctimes%5Cfrac%7B1-%281%2BYTM%2F2%29%5E%7B-2t%7D%20%7D%7BYTM%2F2%7D%20%2B%20%5Cfrac%7BCP%7D%7B%281%2BYTM%2F2%29%5E%7B2t%7D%7D)
First par being the present value of the coupon payment and second the redeem of the face value at the end of the bond.
market price 107.2
face value 100
time = 19
rate 8.8%
C = annual coupon payment 100 x 8.8% = 8.8
You solve this using a financial calculation and get the semiannual rate
YTM/2 = 0.040268160
then multiply by 2 to get the annual YTM
0.040268160 x 2 =
YTM = 0.08053632 = 8.05%
(C)
Effective Annual Yield
![(1+HPR)^{365/time} -1 = EAY](https://tex.z-dn.net/?f=%281%2BHPR%29%5E%7B365%2Ftime%7D%20-1%20%3D%20EAY)
where:
Holding period return:
![\frac{Net \: Return}{Investment} = HPR](https://tex.z-dn.net/?f=%5Cfrac%7BNet%20%5C%3A%20Return%7D%7BInvestment%7D%20%3D%20HPR)
In this case:
coupon payment + redem - investment = net return
8.8 * 19 + 100 - 107.2 = 160
160/107.2 = 1.492537313
Then
![(1+HPR)^{365/time} -1 = EAY](https://tex.z-dn.net/?f=%281%2BHPR%29%5E%7B365%2Ftime%7D%20-1%20%3D%20EAY)
![(1+1.142537313)^{\frac{365}{19\times365}} -1 = EAY](https://tex.z-dn.net/?f=%281%2B1.142537313%29%5E%7B%5Cfrac%7B365%7D%7B19%5Ctimes365%7D%7D%20-1%20%3D%20EAY)
EAY = 0.049242509 = 4.9242509%
Answer:
Value of S=$25000.
Explanation:
Value of P= $75000
Value of n= 5 years
Value of AOC= $36000+ $1500k (k=1 to 5)
Since the salvage value would be after 5 years=
S=($75000- $10000*5) = $75000- $50000= $25000.
Value of S=$25000.
Answer:cost of goods sold for Liberty to enter on her Schedule C = $12,000
Explanation:
Cost of goods sold (COGS) of a company are all the costs ie( the raw materials and labor ) involved directly in the production of the particular goods sold by the company.
Given
Beginning Inventory = $50,000
Purchases regarding Labour and materials= $20,000
Ending inventory = $58,000
Cost of Goods Sold is calculated as Beginning Inventory + Purchases During the Period – Ending Inventory
$50,000 + $20,000 - $58,000
$70,000 - $58,000
$12,000
Answer:D.None of the option is correct, the correct answer is Buy; savings=$203,000
Explanation:
The firm will Incurred the total fixed overhead it decides to make.
The total cost of making 6000 units is $163*6000=$978,000
The total cost of buying is $144*6000= $864,000 and when we deduct $89,000 to be saved from fixed overhead by buying we have a total cost of( $864,000-$89,00) =775,000.
This invariably means the company will save ($978,000-$775,000) which is equal to= $203,000 by buying.
Is an example of Market segmentation, which divides the market in half, due to a different demographics like age, target market etc.
The new target market that divides the market is possibly ages: 6-9
Hope this helps.