What does earning potential mean

Bond Yields and Rates of Return A 30-year, 10% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a c

Nookie1986 [14]

Answer:

The bond's yield to maturity is 9.45% using Excel to get exact values, and 9.59% using approximate method.

Explanation:

We can calculate is using 2 ways, using Excel to get the exact percentage or with approximate methods, calculating the semi-annual Yield to Maturity using the following formula

$YTM_{sm} =\cfrac{PMT+\cfrac{FV-PV}n}{\cfrac{FV+PV}2}$

And from there we can calculate the Yield to Maturity just by multiplying the semi-annual one by 2.

Identifying the given information.

We have a period of 30 years, so for the semiannual bond we have $n=2(30) = 60$ periods.

The face value, FV, is $1000, the coupon rate is 0.10, thus we can use them to find the interest per period PMT.

$PMT=0.10 \times \cfrac{1000}{2}\\PMT=\$ 50$

The current price of the bond, PV is $1050.

Replacing the values on the semiannual Yield to Maturity

$YTM_{sm} =\cfrac{PMT+\cfrac{FV-PV}n}{\cfrac{FV+PV}2}$

$YTM_{sm}=\cfrac{50+\cfrac{1000-1050}{60}}{\cfrac{1000+1050}{2}}$

Simplifying we get

$YTM_{sm}=4.797\%\\$

Finding the Yield to Maturity.

We can just multiply by 2 to get the Yield to Maturity from our previous result and rounding it to 2 decimals we get

$YTM = 2 YTM_{sm}\\YTM=9.59\%$

Alternatively we can use Excel and write:

RATE(n, PMT, PV, FV)*2

That is

RATE(60,50,1050,1000)*2

And we will get the exact Yield to maturity 9.49%

3 0

3 years ago

Fergie has the choice between investing in a State of New York bond at 4.1 percent and a Surething Inc. bond at 6.8 percent. Ass

iragen [17]

Answer:

The state of New York should offer bonds at 4.76% to make indifference to purchase their bonds than Surething Inc.

Explanation:

the corporation has to pay income taxes while the State of New York do not pay for income taxes thus his yield is after-tax.

Surething Inc after tax rate:

pre-tax x (1 - tax-rate) =6.8% x ( 1 - 30%) = 0.068 x (1-0.30) = 0.0476 = 4.76%

Currently the corporation bond yield a higher rate than the State of New york (4.76% against 4.10%)

7 0

3 years ago

walmart and the home depot emphasize consistently low prices rather than periodic discounts with a retail pricing strategy calle

Dvinal [7]

Walmart and Home Depot emphasize consistently low prices and eliminate most of the markdowns with strategy called everyday low pricing.

<h3>What is everyday low price?</h3>

Everyday low price is a pricing strategy that assures customers of a cheap price all the time without forcing them to wait for discount price occasions or comparison shop. In addition to saving retail businesses the time and money required to mark down prices during sales, EDLP is also thought to increase customer loyalty. An EDLP retailer's price will typically fall between a high-low retailer's discounted price and its non-discounted price. It is typical for rival shops to divide the market into segments using various pricing heuristics. The segments are made up of two distinct groups of consumers with various buying habits for both final purchases and pre-purchase research. They are prepared to conduct research to find discounts and to stockpile goods when deals are available.

To learn more about everyday low pricing, visit:

brainly.com/question/13055094

#SPJ4

8 0

1 year ago

When workers use technology to work from home or an office center, they are _____.

xz_007 [3.2K]

Your answer is <span>telecommuting or B.</span>

6 0

3 years ago

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Sometimes, unethical behaviour appears from employees who advance their vested interests over the company properties, please exp

Fofino [41]

Unethical behavior means an action exhibited by someone, which are oppose to what is expected of such individual occupying such position to act in normal circumstance.

Amongst the employees whose company properties are vested in or used by. Such property are meant to be used effectively, with good faith and only for the cause of the profitability of the organisation.

Example of Unethical behavior from employees concerning the misuse of companies properties are as follows:

a. Using a company car for leisure

b. Using a company computer to surf social media

c. Mismanagement of the company resources

Learn more about this here <em>brainly.com/question/9740334</em>

6 0

3 years ago

Read 2 more answers