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
Naddika [18.5K]
3 years ago
11

Marwick Corporation issues 15%, 5 year bonds with a par value of $1,070,000 and semiannual interest payments. On the issue date,

the annual market rate for these bonds is 13%. What is the bond's issue (selling) price, assuming the Present Value of $1 factor for 6.5% and 10 semi-annual periods is 0.5327 and the Present Value of an Annuity factor for the same rate and period is 7.1888?
Business
1 answer:
Over [174]3 years ago
7 0

Answer:

The bond's issue (selling) price = $1,146,890.2

Explanation:

The selling price of the bond is equivalent to the present value of all the cash flows that are likely to accrue to an investor once the bond is bought. These cash-flows are the periodic coupon payments that are paid semi anually and the par value of the bond that will be paid at the end of the 10 years.

During the 5 years, there are 10 equal periodic coupon payments that will be made. In each  year, the total coupon paid will be $1,070,000*0.15=$160,500 and this payment will be split into two equal payments equal to  \frac{160,500}{2}=$80,250. this stream of cashflows is an ordinary annuity

The periodic annual market rate is equal to \frac{0.13}{2}=0.065

The  PV of the cashflows = PV of the coupon payments + PV of the par value of the bond

=$80,250*PV Annuity Factor for 10 years at 6.5% + \$1,070,000*\frac{1}{(1+0.065)^10}

=$80,250*7.1888+$1,070,000*0.5327 = $1,146,890.2

You might be interested in
A(n) _______ list can help you gain an understanding of contacts who met a certain criteria on a particular date. Then you can l
Klio2033 [76]

Answer: a. Static

Explanation:

A static list is a list of contacts you've gathered over a period of time for a purpose.

4 0
3 years ago
David is recently divorced and his ex-wife took most of their kitchen equipment when she relocated. He's decided to host a Pampe
Anestetic [448]

Answer:

The correct answer is C

Explanation:

Specialty retailer is the kind of retailer whose focus is on a particular categories of the product like office supplies or women's clothing.

So, in this case, David decided to host a party of Pampered Chef and he could purchase the items of the Pampered Chef at a discount and even the free items as he is hosting a party. So, Pampered Chef will be classified as the  specialty retailer.

5 0
3 years ago
According to surveys, at work, fair treatment reflects concrete actions such as, "employees are treated with respect and _______
Naddika [18.5K]

The answer for the blank section of the sentence is treated fairly.

In a work place, fair treatment means that employees are treated fairly between one another, which involves respecting their privacy, providing feedback, and avoiding discrimination as well as ensuring that employee’s rights are upheld. Fair treatment is an important factor that would determine whether an employee will stay long with a company or not.

5 0
3 years ago
During the​ year, ​, ​Inc., has in​ revenues, in​ expenses, and in dividend payments.​ Stockholders' equity changed by
Bezzdna [24]

Answer:

$198,000

Explanation:

Here is the full question used in answering this question :

During the year, Fast/Wash Inc., has $310,000 in revenues, $105,000 in expenses, and $7,000 in dividend payments. Stockholders equity changed by

Change in stockholders equity = +310,000 -  $105,000 -  $7,000 = $198,000

Income increases stockholders equity while, dividend payments and expenses reduce stockholders equity.

8 0
3 years ago
"Stephanie would like to purchase a bond that has a par value of $1,000, pays $100 at the end of each year in coupon payments, a
Rzqust [24]

Answer:

The price of the bonds = $951.963

Explanation:

<em>The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate  </em>

Value of Bond = PV of interest + PV of RV  

The PV of interest payment

A ×(1- (1+r)^(-n))/r

A- interest payment, r- interest rate, n- number of years

Interest payment  = 100

PV = 100× (1- 1.12^(-3))/0.12= 240.183

PV of redemption value  

PV = RV× (1+r)^(-n)

RV- Redemption value - 1,000, r- interest rate, number of years, number of years- 3

PV = 1000× 1.12^(-3) = 711.7802

The value of bond = 240.18 + 711.78= 951.963

The price of the bonds = $951.963

3 0
4 years ago
Other questions:
  • What causes you to pay the prices that you do for these goods and services? What determines the price that's on the price tag? W
    8·1 answer
  • 24.
    12·1 answer
  • Kamper Company sells two products Big Z and Little Z. Current direct material and direct labor costs are detailed below. Next ye
    15·1 answer
  • First question, please help. My teacher is super mad rn, need to finish dis.
    10·1 answer
  • Never, Inc., earns book net income before tax of $500,000. In computing its book income, Never deducts $50,000 more in warranty
    5·1 answer
  • Calculate the AT- WACC with a 60% debt and 40% equity financing structure.
    14·1 answer
  • Kramer Industries has cash of $ 42 comma 000​; net Accounts Receivable of $ 47 comma 000​; shortminusterm investments of $ 13 co
    6·1 answer
  • A semiprofessional baseball team near your town plays two home games each month at the local baseball park. The team splits the
    12·1 answer
  • Upper and lower extremity of bursitis​
    14·1 answer
  • The journal entry used to record the payment of a discounted note is
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!