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riadik2000 [5.3K]
3 years ago
14

Paul's Dogs Corp. has 9 percent coupon bonds making annual payments with a YTM of 8.5 percent. The current yield on these bonds

is 8.85 percent. How many years do these bonds have left until they mature
Business
1 answer:
Setler79 [48]3 years ago
4 0

Answer:

4.17 years

Explanation:

For Bond,

Let's take Bond Par Value = $1,000

Coupon Rate = 9%

YTM = 8.5%

Current Yield = Annual Dividend/Current Price

0.0885 = 90/Bond Price

Bond Price = $1,016.95

Calculating Time left to Maturity,

Using TVM Calculation,

T = [FV = 1000, PV = 1016.95, PMT = 90, I = 0.085]

T = 4.17 years

So,

Time left to Maturity = 4.17 years

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Explain how test-marketing can increase profits.
kirill [66]

Answer:

Test marketing holds a lot of importance for the company. It allows

the company to test their product in a small region so as to get an

idea whether the product will work in a bigger market or not.

Through this, the company can measure the performance of the

product and can decide whether it should be released nationwide

for sale. Through this, the company can estimate the earnings that

can be earned through this product beforehand.

Explanation:

7 0
3 years ago
Pharoah Company purchased $2600000 of 8%, 5-year bonds from Sheridan, Inc. on January 1, 2021, with interest payable on July 1 a
kobusy [5.1K]

Answer:

$75,260

Explanation:

Calculation for What should Pharoah Company report as other comprehensive income and as a separate component of stockholders' equity

Using this formula

Comprehensive income/separate component of stockholders' equity=Fair value-(Sales of bonds-July 1, 2021 Amortized premiums-December 31, 2021 Amortized premiums)

Let plug in the formula

Comprehensive income/separate component of stockholders' equity=$2,780,000 - ($2,724,740 - $9,820 - $10,180)

Comprehensive income/separate component of stockholders' equity=$2,780,000-$2,704,740

Comprehensive income/separate component of stockholders' equity= $75,260

Therefore What should Pharoah Company report as other comprehensive income and as a separate component of stockholders' equity is $75,260

8 0
2 years ago
During the​ year, Xero,​ Inc., experienced an increase in net fixed assets of $ 300 comma 000 and had depreciation of $ 204 comm
ElenaW [278]

Answer:

$120,000

Explanation:

NFAI = Change in net fixed assets + Depreciation

         = $300,000 + $204,000

         = $504,000

NCAI = Change in current assets - Change in accounts payable

         = $146,000 - $73,000

         = $73,000

OCF = $697,000

FCF = OCF - NFAI - NCAI

       = $697,000 - $504,000 - $73,000

       = $120,000

5 0
3 years ago
A check for $5000 drawn on bank a by a depositor and been deposited in bank b. assume that required reserve ratio is 10%. Change
Alexeev081 [22]

Answer: -$500

Explanation:

The required return is the proportion of deposits that banks are supposed to keep with the central bank and in this case it is 10%.

The required reserves from the $5,000 is;

= 10% * 5,000

= $500

If the $5,000 is withdrawn from Bank A, the required reserves will decrease by $500.

7 0
3 years ago
Six months​ ago, the price of gasoline was​ $2.20 per gallon.​ Now, the price is​ $2.40 per gallon. In response to this price​ i
k0ka [10]

Answer:

4.545

Explanation:

Given:

Six months​ ago, the price of gasoline was​ $2.20 per gallon.

Now, the price is​ $2.40 per gallon.

In response to this price​ increase, the number of gallons of gasoline purchased has declined by 2 percent.

Question asked:

Based on this​ information, what is the absolute price elasticity of demand for​ gasoline?

<u>Solution:</u>

As we know:

Price elasticity of demand = \frac{\% change\ in\ quantity\ demanded}{\% change\ in\ price}

\% change\ in\ quantity\ demanded = \frac{new\ value-old \ value}{old\ value} \times100\\

                                                  =\frac{2.40-2.20}{2.20} \times100\\\\ =\frac{0.2}{2.20} \times100\\ \\ =\frac{20}{2.20} \\ \\ =9.09

\% change\ in\ price=2  ( given)

Price elasticity of demand = \frac{\% change\ in\ quantity\ demanded}{\% change\ in\ price}

                                           =\frac{9.09}{2} \\ \\ =4.545

Thus, the absolute price elasticity of demand for​ gasoline is 4.545

4 0
3 years ago
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