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balu736 [363]
3 years ago
7

Sunset Corp. has a bond outstanding with a coupon rate of 5.94 percent and semiannual payments. The yield to maturity is 5.1 per

cent and the bond matures in 20 years. What is the market price if the bond has a par value of $2,000
Business
1 answer:
borishaifa [10]3 years ago
6 0

Answer:

$2,189.76

Explanation:

<em>The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.</em>

<em>The price of the bond can be calculated as follows:</em>

<em>Step 1</em>

<em>PV of interest payment</em>

Interest payment =( 5.94%× $2000)/2

= $59.4

Semi annual yield = 5.1/2 = 2.6%

PV of interest payment

= 59.4× (1-(1.026)^(-20×2))/0.026)

= 59.4 × 24.41400537

=<em>$ 1,450.19</em>

Step 2

<em>PV of  redemption value</em>

=  2,000 × (1+0.051)^(-20)

= 2,000 × 0.369781925

=   739.56

Step 3

<em>Price of bond  </em>

= $1,450.19 + $739.56  

=$2,189.76

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The answer is below.

Explanation:

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For x < 1995 millimeters:

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From the normal distribution table, P(x < 1995) = P(z < -2.78) = 0.0027

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3 years ago
Predatory pricing refers to a. All of the above are examples of predatory pricing. b. a firm selling certain products together r
mina [271]

Answer:

d. a monopoly firm reducing its price in an attempt to maintain its monopoly.

Explanation:

In a competitive system, a firm practices predatory pricing when it charges prices below its costs in order to eliminate competitors. When the prevailing system is a monopoly, the firm is the only company providing the good and it can practice predatory pricing in the short term to prevent a competitor from entering the market. Thus the firm remains monopolistic.

8 0
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Answer: $400,000

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Only stock that are ISSUED are to be paid dividends on NOT those Authorized.

Even after that, we would still have to remove the Treasury stock because Treasury Stock is stock that was PREVIOUSLY outstanding but was repurchased by the company and so Dividends will not be paid on them.

So now we calculate the Shares Outstanding that are liable for Dividend payment.

That would be,

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Since the dividends are $2.00 per share we then have,

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3 0
3 years ago
Regency Inc. makes disposable cap and gown sets for graduations. Each cap and gown set sells for $15. The average variable cost
melomori [17]

Answer:

The Breakeven point is 13,000 units.

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The breakeven point can be found from the following equation:

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The fixed cost here is $65000.

By putting the values in the above equation, we have:

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5 0
2 years ago
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