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lakkis [162]
3 years ago
7

26. Currently, Bruner Inc.'s bonds sell for $1,250. They pay a $120 annual coupon, have a 15-year maturity, and a $1,000 par val

ue, but they can be called in 5 years at $1,050. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between this bond's YTM and its YTC

Business
1 answer:
maksim [4K]3 years ago
7 0

Answer:

2.11%

Explanation:

From the information given; we use the Excel spreadsheet to compute the  difference between this bond's YTM(Yield to maturity) and its YTC(Yield to call).

From the diagram; we will see that the

YTM(Yield to maturity) = 8.91%

YTC(Yield to call).= 6.81%

Therefore the difference between this bond's YTM and its YTC = (8.91 - 6.81)%

the difference between this bond's YTM and its YTC = 2.11%

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Please find the graph file in the attachment and find its complete solution.

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Learn more:

brainly.com/question/15185517

7 0
3 years ago
Why is it important for managers to pay close attention to their organization’s production system if they wish to be responsive
Marina86 [1]

Explanation:

The production system consists of all integrated activities and operations for the production of goods and services.

Organizational capacity is measured by the set of effective actions of coordination and control of the production system. Therefore, active management of systems monitoring will determine key factors for better meeting consumer demands and needs through continuous improvement in the quality of manufacturing processes, innovations, reduction of waste and unnecessary spending, which enables greater transfer to the customer a product with quality and low cost and represents for the organization gains of competitive and strategic advantages.

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Consider the following information: State of Economy Probability of State of Economy Portfolio Return If State Occurs Recession
mr Goodwill [35]

20.94% is the expected rate of return

<u>Explanation:</u>

<u>The following formula is to be used for the expected rate of return </u>

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The expected rate of return means such return which an investor expects from the amount that has been invested by him into the business organization. It is significant to calculate the rate of return in order to find out the viability of a company.

7 0
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yulyashka [42]

Answer:

That low income can be enough because of either one of these two reasons (or the two at the sime time):

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5 0
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The term economies of scale refers to the fact that as the:
frutty [35]

Answer:

quantity of product produced in a given period increases, the cost of manufacturing each unit decreases

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