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
iogann1982 [59]
3 years ago
15

On January 1, 2015, East Lansing, Inc, issues $2,000,000 of 10 percent, 5-year bonds that pay interest of $100,000 semiannually.

The market rate is 8 percent at the time of issuance. The issue price of the bonds is:____a. $1,852.810 b. $1888,970 c. $1.999.970 d. $2,162.290

Business
1 answer:
Trava [24]3 years ago
5 0

Answer:

The answer is option D

Explanation:

The bond can be issued at par, at a discount or at a premium depending on the coupon rate and the market interest. The price of the bond which pays semi annual coupon can be calculated using the formula of bond price. The formula to calculate the price of the bond is attached.

First we need to determine the semi annual coupon payment, periods and YTM.

Semi annual coupon payments = 2000000 * 0.1 * 6/12 = 100000

Semi annual periods = 5 * 2 = 10

Semi annual YTM = 0.08 * 6/12 = 0.04

Bond Price = 100000 * [(1 - (1+0.04)^-10) / 0.04]  +  2000000 / (1+0.04)^10

Bond Price = $2162217.916

The price of the bond is thus $2162290 approx. The difference in answers is due to rounding off.

You might be interested in
The section of building plans that would show views of a built-in hot tub would be the
JulsSmile [24]
A. Specifications
Make sure to follow @get.sendy on Instagram.
Tony Hawk follows :)
6 0
3 years ago
Before purchasing a car, John sought advice from his friends and researched auto reviews on the Internet. He also visited car de
noname [10]

Answer: b. external information search

Explanation: As majority of us are not experts on everything, in the external information search stage if the consumer decision-making process, one researches for products and services that can satisfy our needs and wants. This is the beginning of risk management where we access pros and cons while taking into account past experiences we have had.

External information search occurs when the buyer has no previous knowledge about a product, which then leads them to seek information from personal or public sources or marketer dominated sources especially when the buyer's previous experience is limited inefficient. During the information search, the options available to the buyer are either identified or clarified.

6 0
3 years ago
Real GDP per capita: cannot grow more rapidly than real GDP. cannot decrease if Real GDP increases. necessarily grows more rapid
katrin [286]

Answer:

Real GDP per capita can increase or decrease when Real GDP increases

Explanation:

Real GDP per capita is calculated by dividing Real GDP by the number of people in a country. Therefore:

  • If population increase more quickly than the increase in real GDP, then real GDP per capita would decrease.
  • If population decreases, stays the same or increases more slowly as Real GDP increases, then real GDP per capita would increase.
4 0
3 years ago
According to the IASB Framework for the Preparation and Presentation of Financial Statements, the qualitative characteristic of
Alexus [3.1K]

Answer:

NEUTRALITY, COMPLETENESS AND FREE FROM ERRORS.

Explanation: IASB( International accounting standards board) is board regulating the preparation of accounting Reports or statements. It released its first framework called CONCEPTUAL FRAMEWORK in the year 1989.

The qualities of a faithful conceptual framework by IASB is to guarantee NEUTRALITY, COMPLETENESS AND ENSURE THAT THE STATEMENT IS FREE FROM ERRORS.

This framework will help to prevent disputes and manage standards in preparation of account statements.

4 0
3 years ago
The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parti
zmey [24]

Answer:

a per se violation of antitrust law.

Explanation:

The antitrust laws can be defined as those laws that are created by the US government to protect consumers from unfair means of competition in market. The aim of creating such laws is to ensure the protection of customers from corruptive business practices and also to ensure safe healthy competitive environment among same business companies.

<u>In the given scenario, the Association of Organic Food Growers is violating the antitrust law by boycotting farmers, ranchers, etc. The antitrust laws are violated by companies in several ways among them is by boycotting</u>.

Boycotting can be defined as an agreement between several companies that excludes a group of customers or market to avert them from buying aanyy goods or products.

This boycotting agreement is a per se violation of antitrust law.

5 0
3 years ago
Other questions:
  • In may, the price of a pair of jeans was 250% of its wholesale cost. in june, the price was reduced by 25%. after an additional
    13·2 answers
  • ​It's widely believed that​ self-driving vehicles will become commonplace in the fairly near future and that their growth will b
    10·1 answer
  • David Ortiz Motors has a target capital structure of 45% debt and 55% equity. The yield to maturity on the company's outstanding
    7·1 answer
  • Treasury bonds have what maturity date?
    5·2 answers
  • In supermarket retailing, _____ percent of endcaps should be unadvertised "sale" items that will cause the customer to be alert
    9·1 answer
  • What is the main aim of business office​
    12·1 answer
  • A company is asking you to evaluate whether to start a specialty tile manufacturing unit. The initial cost of setting up the man
    5·1 answer
  • A firm charges each customer the highest price that customer will pay for the marginal unit under:____.
    14·1 answer
  • Builder's risk coverage is typically procured by the owner, with protection extended to the contractor and subcontractors. Quest
    15·1 answer
  • I need help, please help me ​
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!