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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

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Fox Co. had 120,000 shares of common stock outstanding at January 1. On July 31, it issued 60,000 additional shares of common st
balu736 [363]

Answer:

180 000 common stock shares outstanding

Explanation:

preference shares are not used in calculating earning per share. Earning per share is the part of the firm's profit that is attributed to common stock shares. It is an indicator of financial strength of a company. It also shows the intrinsic value of the company's shares. This can be used to determine if a share is overvalued or under valued in the equity market.

The company  has 120, 000 common stock shares and issued additional 20,000 common stock shares totaling 180,000 common stock shares.

8 0
3 years ago
Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen year loan. What
Harrizon [31]

Answer:

The answer is 2. Ten percent of the principal of the loan

Explanation:

By law, maximum commissions for first trust deed loans are at :

- 5% of the principal for loans less than 2 years or less than 3 years

- 10% of the principal for loans 3years and more.

Second trust deed loans, on the other hand, are stated at 5% for loans up to 2years, 10% for loans between 2-3 years and 15% for loans more than 3 years.

8 0
4 years ago
which term is defined as the state government granting power, license, or real property to a private individual or individuals u
insens350 [35]

law on property rights is defined as the state government granting power, license, or real property to a private individual or individuals using a land patent

A property's legal ownership and permitted uses are governed by property right law. When it comes to land, it has been noted that theft is common. People who purchase properties often lose them to thieves when they are resold to someone else who is unaware that the property has already been sold to someone else. The property right law was established to stop this circumstance from occurring frequently so that the owner of a plot of land would have the legal right to claim ownership for it and use it for any purpose he desired without fear of it being taken by someone else.

To know more about property rights visit here :

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6 0
1 year ago
econ One year a country has negative net exports. The next year it still has negative net exports and imports have risen more th
Vesnalui [34]

Answer:

its trade deficit rose

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Trade deficit occurs when the imports of a country are higher than the exports. It is called the trade deficit. It means the country is importing more value of goods from other countries and exporting less. When Imports grows higher than the growth in exports, the trade deficit eventually rises.

8 0
3 years ago
On January 1, 2021, Red Inc. issued stock options for 200,000 shares to a division manager. The options have an estimated fair v
morpeh [17]

Answer:

$400,000

Explanation:

The compensation expense to be recognized in 2021 is portion of the options value for one year.

Total value of the options=200,000*$6=$1,200,000

Compensation expense per year=fair value of the options/vesting period

fair value of the options is $1,200,000

vesting period is 3 years

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The $400,000 compensation expense is debited to compensation expense account and credited to paid in capital-stock options $400,000 for each of the vesting period until the paid in capital -stock options account balance becomes $1,200,000 at end of year 3

6 0
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