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
BaLLatris [955]
2 years ago
13

A 6-year bond, 8% semiannual coupon bond sells at par ($1,000). Another bond of equal risk, maturity, and par value pays an 8% a

nnual coupon. What is the price of the annual coupon bond?
Business
2 answers:
timofeeve [1]2 years ago
7 0

Answer:

Explanation:

  • The bond has 8% coupon paid semiannually, and those bonds sell at their par value.
  • Since the bond sales at par value, Market rate (Yield) = Coupon rate =8%

<u>Second bond:</u>

  • Coupon rate = 8%
  • Par value = $1,000
  • Semiannual coupon amount = 1000 x 8%/2 = $40
  • Time to maturity = 6 years = 12 semiannual periods
  • Semiannual Yield = 8%/2 = 4%

To get price of this bond we will use PV function of excel:

= PV (rate, nper, pmt, fv, type)

= PV (4%, 12, -40, -1000, 0)

= $1053.32

  • Price of this bond = $1,053.3
weeeeeb [17]2 years ago
5 0

Answer:

$936.65

Explanation:

we firstly need to calculate the yield to maturity in order to calculate the Price of the bond  Since the semiannual bond has the same risk as the annaul bond we will calculate the YTM of the semiannual bond

YTM=C+(F-P)/F+P/2

       =80+(1000-1000)/1000+1000/6*2

        =0.0738/7.38%

 Then we calculate the value of the bond

P= C/(1+YTM)+F/(1+YTM)

  =80/(1+0.0738)^6+1000/(1+1.0738)^6

  =69.38+867.27

   =$936.65

You might be interested in
Vaughn Manufacturing has 11500 shares of 5%, $100 par value, non-cumulative preferred stock and 46000 shares of $1 par value com
Oksana_A [137]

Answer:

$23,000

Explanation:

Total dividends = $138,000 (Paid in 2020)

Common stock outstanding = 46,000 shares

Preferred dividend = Number of shares × Par value × 5%

= 11,500 × $100 × 5%

= $57,500

Dividends received by common stock holders in 2020 is;

= Total dividends - Preferred dividend

= ($138,000 × 1) - ($57,500 × 2)

= $138,000 - $115,000

= $23,000

5 0
2 years ago
How long should you wait before republishing a piece of content to a new website? You shouldn’t wait. Republish it immediately.
Oliga [24]

Answer:

The correct answer is Two weeks.

Explanation:

If you publish twice in a week, in the next you publish ten times, once in the third week and again ten times the next, your visits will take it very strangely. One of the ways to maintain a loyal audience is precisely to make her know the frequency of your blog post.

Only by having this regularity, your visitors will know how often they should visit your website.

In this way you eliminate the likelihood of someone visiting your blog and feeling frustrated when they did not find anything new when it was for that reason that they accessed, or finding 15 new posts when he hoped to find only 1.

8 0
3 years ago
WHAT IS OPERANT CONDITIONG
finlep [7]
Operant conditioning is a type of associative learning process through which the strength of a behavior is modified by reinforcement or punishment. It is also a procedure that is used to bring about such learning.
4 0
3 years ago
Read 2 more answers
Treasury stock that was purchased for $2,500 is sold for $3,000. As a result of these two transactions combined, a.income will b
Fantom [35]

Answer:

The stockholder's equity will be increased by $500

Explanation:

While stockholders equity is the amount of assets available to shareholders after all liabilities have been settled , treasury stock is the stock that is bought back by the issuing organisation with the aim of reducing the number of outstanding stock in the open market.

Looking at the scenario given , it was an indirect way of raising fund and increasing the equity of the stockholders equity as the treasury stock was later resold at a higher price.

Therefore , the stockholder's equity increases by 3,000- 2500 = 500

4 0
3 years ago
Your healthy 63-year-old neighbor is about to retire and comes to you for advice. From talking with her, you find out she was pl
pashok25 [27]

Answer:

Both mutual funds and money market funds are similar in the sense that they pool money from several investors in a variety of instruments. The difference is that money market funds pool the money in very liquid, short-term securities, while mutual funds do the same but in less liquid, longer-term securities.

The 63-year-old neighbor should therefore split the money around 60/40, 60% of the funds for mutual funds, in order to have long-term security, and 40% in the money market funds, in order to have quick cash available when needed.

5 0
2 years ago
Other questions:
  • In which situation would a savings bond be the best investment to eam interest
    8·1 answer
  • The study of economics on a smaller scale is called
    11·1 answer
  • If a company purchases plastic that they will melt and form into milk jugs that they will then sell to milk plants, the cost of
    15·1 answer
  • A recession is a period of significant, widespread declines in:
    10·1 answer
  • Denber Co. acquired 60% of the common stock of Kailey Corp. on September 1, 2019. For 2019, Kailey reported revenues of $810,000
    9·1 answer
  • John’s Smoothie Stand at Utah’s Wasatch County’s Demolition Derby sells bananas. If John bought 53 lbs. of bananas at $.32 per p
    8·1 answer
  • Leigh has information on how many customers purchase bagels at her coffee shop. With the bagel sales numbers from the past four
    6·2 answers
  • Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remainin
    7·1 answer
  • There are two FICA taxes withheld from your paycheck: Social Security (6.2%) and Medicare (1.45%). Your gross pay for this month
    12·1 answer
  • Which of these people is part of the labor force?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!