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]
3 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]3 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]3 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
Miller, Inc. has 5,000 shares of 6%, $400 par value, cumulative preferred stock and 100,000 shares of $4 par value common stock
grin007 [14]

Answer:

$40,000

Explanation:

Calculation to determine the amount of dividends received by the common stockholders in 2017

First step is to calculate the preferred stock

Preferred stock=(5,000 shares*$400)*6%

Preferred stock=$2,000,000*6%

Preferred stock=$120,000

Now let calculate the amount of dividends received by the common stockholders in 2017

Dividend Received=($200,000-$120,000)/2

Dividend Received=$80,000/2

Dividend Received=$40,000

Therefore the amount of dividends received by the common stockholders in 2017 will be$40,000

4 0
3 years ago
A fast-food restaurant serves the student community within a university campus. The restaurant newly introduces pocket-friendly
MissTica

Answer:

These are the options for the question:

A. Segmentation

B. Cannibalization

C. Market penetration

D. Product bundling

And this is the correct answer:

B) Cannibalization

Explanation:

Cannibalization occurs when a newly introduced product reduces the market share of previous products.

In this case, the pocket-friendly combo meals have effectively made the rest of the menu unattractive to customers, it has cannibalized the other meals.

This effect is refer to as cannibalization, because as the original meaning refers to a hostile act withing the same species, in marketing, this effect occurs among products within the same company.

4 0
4 years ago
Franco's Pizzeria sells slices of pizza for $2.00. According to the market demand schedule and assuming ceteris paribus, what ha
Furkat [3]
Due to the increase in the price of the pizza, it is conclusive that the demand will decrease. Assume that the amount he will earn will stay the same and it is the product of the number of pizza and the price, the choice that would satisfy this is the third choice. 
8 0
3 years ago
Goodwill represents the excess of the implied value of an acquired company over the
Paul [167]

Answer: Option A

                                           

Explanation: In simple words, goodwill refers to the additional value that an organisation have from its identifiable assets due to its operations over a period of time.

In other words, it can be defined as an intangible asset which an organisation creates over a period of time while establishing the brand image. These assets are not depreciated but are tested for impairment every year. For example brands like apple, Reebok and McDonald have high goodwill in the market which attracts customers towards them

Thus, from the above we can conclude that the correct option is A.

6 0
3 years ago
Q 12 question 12 a project manager must publish a project schedule. activities, start/end times, and resources are identified. w
Aloiza [94]

The next step after publishing a project schedule activities, start/end times and resources are identified is TO CONFIRM THE AVAILABILITY OF RESOURCES

Once the resources are identified the project manager should make sure that the identified resources are available

6 0
3 years ago
Other questions:
  • What was the most common form of taxation during the colonial era?
    13·1 answer
  • How does tourism benefit the economy
    14·1 answer
  • Organizations that build​ internet, intranet,​ extranet, or mobile applications are utilizing the​ ________ support business act
    7·1 answer
  • Which type of office machine scans each page of a document, translates the information into electronic impulses, and transmits t
    12·1 answer
  • A Metro City ordinance imposes a jail term, without a trial, on all vendors who operate in certain areas. A court would likely r
    15·1 answer
  • Consider that you own the following position at the beginning of the year: 200 shares of US Bancorp at $29.89 per share, 300 sha
    13·1 answer
  • Buckeye Incorporated has operating income of $ 434,000​, a sales margin of 7​%, and a capital turnover rate of 2. What amount wo
    7·1 answer
  • As part of a good Section 351 transaction Andy contributes his business with a basis of $200,000 in exchange for $300,000 worth
    12·1 answer
  • An organization's job structure consists of relative pay for different functions and different levels of responsibility.
    6·1 answer
  • Among the major channels of management communications, _____ is the predominant method of communicating
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!