1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
WITCHER [35]
3 years ago
6

Delta Corporation has a bond issue outstanding with an annual coupon interest rate of 7 percent and 4 years remaining until matu

rity. The par value of the bond is $1,000. Determine the current value of the bond if present market conditions justify a 14 percent required rate of return. The bond pays interest annually.

Business
1 answer:
zvonat [6]3 years ago
6 0

Answer:

The current value of the bond is $796.04

Explanation:

The current value of a bond is the present value of all the cash inflows expected from the bond in the form of an annuity of interest payments and the term end face value payment discounted by the required rate of return or market interest rates. Thus, the current price of this bond will be,

Interest payment from the bond per year = 1000 * 0.07 = $70

The present value of ordinary annuity formula is attached in the answer.

Price = 70 * [ (1 - (1+0.14)^-4) / 0.14 ]  + 1000 / (1.14)^4

Price of the bond = $796.04

You might be interested in
Why do economists generally favor deregulation of most industries?
Kazeer [188]
Sorry this description is a bit confusing but i couldn't really think of a way to phrase it properly :)

most economists believe that deregulation has the potential to be helpful because the fact that things aren't regulated by the government increases competition in people selling the same wares, which normally ends up lowering the price of that specific good and/or improving the quality of the good drastically (which means more people will be buying, it whatever it may be, which is good for the economy) 


8 0
2 years ago
X Corporation and its two divisions, Domestic and Foreign, appear below:
anyanavicka [17]

Answer: $192,200

Explanation:

Based on the information that have been provided in the question, the segment margin for the domestic division will be calculated as:

Segment Margin = Segment Sales Revenue - Segment Variable Expenses - The Traceable Fixed Cost

= $640,000 - $371,300 - $76,500

= $192,200

5 0
2 years ago
The broad goal of __________ is to identify and define both marketing problems and opportunities and to generate and improve mar
amid [387]

Answer:

D. Marketing research

8 0
3 years ago
Find the effective rate of interest to the nearest hundredth percent if $60.94 is earned in one year on a deposit of
Nata [24]

Answer:

6.25%

Explanation:

The formula for calculating interest rate is as follows

I= P x R x T

Where

I= interest,  P= principal amount, T is time

in this case: I= $60.94, P=$975, T=1 year

Therefore:

$60.94 = $975 x( r/100) x 1

$60.94 =975(r/100) multiply both side by 100 to get rid of the fraction.

6094=975r

r = 6094/ 975

r = 6.2502

interest rate = 6.25%

8 0
2 years ago
Delta Diamonds uses a periodic inventory system. The company had five one-carat diamonds available for sale this year: one was p
mote1985 [20]

Answer:

B. $2,300.

Explanation:

The computation of the ending inventory using FIFO method is given below:

Since there are 5 diamonds and one is sold

So, the ending inventory units should be

= 5 - 1

= 4

Now the ending inventory be

= 2 × $600 + 2 × $550

= $1,200 + $1,100

= $2,300

Hence, the option b is correct

4 0
2 years ago
Other questions:
  • The management of Penfold Corporation is considering the purchase of a machine that would cost $440,000, would last for 7 years,
    13·1 answer
  • Faldo Corp sells on terms that allow customers 45 days to pay for merchandise. Its sales last year were $325,000, and its year-e
    12·1 answer
  • New viewpoints and ideas are valuable to companies because it allows them to ______.
    13·2 answers
  • When interest rates in a given economy are reduced, it causes firms to employ __________ capital goods. In terms of the producti
    11·1 answer
  • The Supplies account for Vulcan Cleaning Services had a debit balance of $200 at the beginning of the month. Additional supplies
    15·1 answer
  • You are hired by the Chair of the Federal Reserve to manage the trading desk at the New York Fed and the Chair tells you that he
    13·1 answer
  • An organization decides to ask three advertising agencies to pitch a proposal to handle the organization's business, instead of
    7·1 answer
  • Which of the following is NOT a repayment plan option? What is the answer
    13·1 answer
  • discuss how businesses can use mind mapping and brainstorming to identify new and innovative business opportunities​
    8·1 answer
  • When a multinational corporation opens a new factory in another country, what economic responsibilities must it follow? Are ther
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!