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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

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Distributive, procedural, and interactional are
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Answer:

Organizational justice

Explanation:

Organizational justice concerns employees' understanding of fairness, results, and processes within a company. Distributive, procedural, and interactional are the three types of organizational justice that companies must embrace in order to have happy and productive employees.

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You decide to invest in a period annuity that offers 4.5% APR compounded monthly for 20 years. How much money will you need to i
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Which of the following answer options are your employer's responsibility? (OSHA)
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Answer: A, B, and C. ALL OF THE ABOVE!

Explanation:

They're all the correct answer.

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2 years ago
Activity-Based Costing for a Service Business Sterling Hotel uses activity-based costing to determine the cost of servicing cust
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Answer:

Total cost= $40.3

Explanation:

Giving the following information:

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8 0
3 years ago
E3-27 (book/static) The Home Style Eats has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants to
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Answer:

Explanation:

1.

Contribution Margin=Sales - variable cost =$8.75-$3.50=$5.25

Contribution Margin Ratio = Contribution Margin / Sales = $5.25/ $8.75=60%

Pre-Tax Net Income=Net Income/(1-tax rate)

$117,600/(1-0.36)=$183,750

Target Revenue =Fixed cost +Target Pre-Tax net Income/Contribution margin Ratio =($430,500+$183,750)/0.6=$1,023,750

2. Number of customers needed to Break Even

Fixed costs/Contribution margin per unit=$430,500/$5.25=82,000 Customers

Number of customers to earn 117,600 = (Fixed costs + 117,600)/5.25 = (430,500+117,600)/5.25 = 104,400

3.  

Sales (170,000*8.75)   1,487,500

Less: Cost of goods sold   (170,000*3.50)  -595,000

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Less: fixed costs  -430,500

Net Income before tax  462,000

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Net Income after tax   295,680

3 0
2 years ago
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