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
11111nata11111 [884]
4 years ago
9

. General Motors’s bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $ 1,000 par value, and

the coupon rate is 8 percent. The bonds have a yield to maturity of 9 percent. What is the current market price of these bonds?
Business
1 answer:
pshichka [43]4 years ago
5 0

Answer:

Present value of the bonds 935.82

Explanation:

We have to calculate the present value of the coupon interest service

and the face value redeem at maturity.

C \times \frac{1-(1+r)^{-time\times} }{rate} = PV\\

C = 1000 x 0.8 = 80

rate = 9%

time = 10

80 \times \frac{1-(1+0.08)^{-10} }{0.08} = PV\\

PV = 513.41262

\frac{Face}{(1 + rate)^{time} } = PV

Face Value = 1000

rate = 0.09

\frac{1000}{(1 + 0.09)^{10} } = PV

PV = 422.410807

<u>Present value of the bonds </u>

annuity PV + face PV = market price

513.41262 + 422.410807 = 935.823427 = 935.82 market value

You might be interested in
In the specific factors model, a country's production possibility frontier is ________ because of ________." a straight line; di
Olegator [25]

Answer:

a curved line; diminishing marginal returns

Explanation:

The specific factor model is one that assumes that a country produces two goods using two factors of production in a perfectly competitive market. That is labour and and capital.

The production possibility frontier is defined as the maximum combination of two products that can be produced by a country. The PPF tends to be curved because of the law of diminishing returns. As more of one factor of production is added it will result in reduced output of the product over time.

7 0
3 years ago
You’ve been introduced to Amy at a local business and professional women’s meeting. After you’ve chatted with her for a few minu
Alekssandra [29.7K]

In order for you to find out if Amy will be a valuable new business contact, you need to ask her questions about her business and tell her what you need.

7 0
3 years ago
Read 2 more answers
What's one reason that buyers might need additional cash at closing for a short sale?
Ugo [173]

Short sales don't clear liens from the title, so buyers may have to pay debts at closing.

A short sale affects whilst a vendor would not obtain sufficient coins from a buyer to pay off their mortgages. The seller may want to have paid or borrowed an excessive amount for the assets. The housing marketplace may have dropped, so its honest marketplace price is much less than the modern-day loan stability.

A short sale is when a mortgage lender has the same opinion to accept a loan payoff quantity less than what's owed with the purpose to facilitate a sale of the property by a financially distressed owner. The lender forgives the remaining stability of the mortgage.

A short sale comes with quite some catches. There are extra parties involved than a standard sale making the system complex and often lengthy. In a conventional home sale, price negotiations show up among the consumer and vendor (or their representatives), now not the seller's bank.

Learn more about the short sales here: brainly.com/question/25743891

#SPJ4

7 0
2 years ago
17. In the last stage of the decision-making process, managers may decide to
lubasha [3.4K]

The last stage of the decision making process is to monitor or evaluate the decision that was made for effectiveness.

During this stage, a manager is going to look at the decision that they made and see if it was correct, or if they need to make any changes. During this stage the manager my decide that they made the incorrect decision, and then will need to go through the decision making process again.

4 0
3 years ago
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal yield to maturity is 9.25%,
kozerog [31]

Answer:

8.99%

Explanation:

For this question we use the PMT function that is presented on the excel spreadsheet. Kindly find it below:

Given that,  

Present value = $975

Future value = $1,000

Rate of interest = 9.25%  ÷ 2 = 4.625%

NPER = 25 years × 2 = 50 years

The formula is shown below:

= PMT(Rate,NPER,-PV,FV,type)

The present value come in negative

So, after solving this, the PMT is $44.96

Now the annual PMT is

= $44.96 × 2

= $89.92

So, the coupon interest rate is

= $89.92 ÷ $1,000

= 8.99%

4 0
4 years ago
Other questions:
  • On January 1, 2020, Milwaukee Corporation issued $3,000,000 of its 20-year, 8% bonds payable at 96. Interest is payable annually
    8·1 answer
  • Henry wanted to buy a sectional sofa with in-built recliners. He extensively researched sofas and consulted his friends before b
    15·1 answer
  • In c++ when a relational expression is false, it has the value ________.
    13·1 answer
  • A firm has fixed assets of $28,000, long-term debt of $12,000, current liabilities of $4,000, current assets of $5,000 and equit
    13·1 answer
  • Red Sun Rising just paid a dividend of $2.43 per share. The company said that it will increase the dividend by 15 percent and 10
    9·1 answer
  • Taxon Corp. granted restricted stock units (RSUs) representing 52 million of its $1 par common shares to executives, subject to
    8·1 answer
  • In the first stage of the negotiation, Alisa explicitly expressed her surprise, frustration, and dissatisfaction that executives
    14·1 answer
  • When reimbursing the petty cash fund: Multiple Choice Cash is debited. Petty Cash is credited. Petty Cash is debited. No expense
    11·1 answer
  • Demand for stereo headphones and MP3 players for joggers has caused Nina Industries to grow almost 50 percent over the past year
    5·1 answer
  • In the national income accounts, the purchases of durables, nondurables, and services by households are classified as?
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!