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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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A firm has $600,000 in current assets and $150,000 in current liabilities. Which of the following is correct if it uses cash to
Molodets [167]

Answer:

4) Net working capital will not change.

Explanation:

The best answer to the question is the 4th option. The net working capital will not be changed if company would be usingcash to pay off their accounts payable. Also the difference that exists between current assets and current liabilities will also stay the same way as it was before. current ratio will go up to 5.5.

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4 0
3 years ago
Bank ABC has checkable deposits of $415 million and total reserves of $50 million. The required reserve ratio is 9 percent. The
umka21 [38]

Answer:

$12,650,000.

Explanation:

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Reserves = Deposits - outstanding loans

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Required reserves = reserve requirement x deposits

0.09 x 415 million = 37.35 million

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6 0
3 years ago
Suppose terri has a​ 25% chance of becoming disabled in any given year. if she does become​ disabled, she will earn​ $0. if terr
mash [69]
<span>Expected utility is calculated by multiplying the utility of each possible outcome by its probability and summing the products. So if Terri has a 25% chance of becoming disabled and purchases a policy then her expected utility is: (.25 x $20,000) + (.75 x $80,000) = $5,000 + $60,000 = $65,000. On the other hand, if Terri does not purchase a policy then her expected utility is (.25 x $0) + (.75 x $80,000) = $0 + $60,000 = $60,000.</span>
5 0
3 years ago
For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or expense, (2) identify the
romanna [79]

Answer:

Please see explanation.

Explanation:

1. and 2.

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a. Cash                                asset                            Debit

b. Legal Expense               expense                       Debit

c. Prepaid Insurance          asset                            Debit

d. Land                                asset                            Debit

e. Accounts Receivable     asset                            Debit

f. Dividends                         equity                          Debit

g. License Fee Revenue    revenue                      Credit

h. Unearned Revenue        liability                        Credit

i. Fees Earned                     revenue                      Credit

j. Equipment                        asset                           Debit

k. Notes Payable                 liability                        Credit

l. Common Stock                equity                          Credit

Journal entries to increase the balance:

                                                             Dr                          Cr

a. Cash                                            Cash                        Revenue

b. Legal Expense                     Legal expenses              Cash

c. Prepaid Insurance               Prepaid Insurance          Cash        

d. Land                                      Land                                Cash                                    

e. Accounts Receivable        Accounts receivable        Revenue

f. Dividends                           Retained earnings            cash

g. License Fee Revenue      Cash                                   License Fee Revenue

h. Unearned Revenue         Cash                                  Unearned revenue

i. Fees Earned                     Cash                                   Fees Earned

j. Equipment                        Equipment                          Cash

k. Notes Payable                Cash                                    Notes Payable

l. Common Stock                Cash                                    Common Stock

7 0
3 years ago
You decide to go on a shopping spree. You make a purchase at Sears, and the cashiers says "Can I put your purchase on your Sears
bagirrra123 [75]

Answer:

B i think

Explanation:

4 0
3 years ago
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