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
trapecia [35]
3 years ago
9

Red Mountain, Inc. bonds have a face value of $1,000. The bonds carry a 7 percent coupon, pay interest semiannual, and mature in

13.5 years. What is the current price of these bonds if the yield to maturity is 6.82 percent? A. $989.50 B. $994.56 C. $1, 015.72 D. $1.018.27E. $1, 020.00
Business
1 answer:
olganol [36]3 years ago
4 0

Answer:

R = 7% x $1,000 = $70

Po= R/2(1-(1+Kd/m)-nm/Kd/m + FV/(1+Kd/m)nm

Po = 70/2(1-(1+0.0682/2)-13.5x2/0.0682/2 + 1,000/(1+0.0682/2)13.5x2

Po = 35(1-(1+0.0341)-27/0.0341 + 1000/(1+0.0341)27

Po = 35(17.4663) + 1,000/2.4728

Po = $611.3205 + $404.40

Po = $1,015.72

The correct answer is C

Explanation:

The current price of a bond is equal to present value of coupon plus the present value of face value of the bond. The bond pays semi-annual interest, thus, we will divide the coupon by 2 and then determine the present value. The bond yield will also be divided by 2.

Po = Current price of the bond, R = Coupon, Kd = Bond yield, FV = Face value, n = Bond maturity and m = No of times coupon is paid in a year

You might be interested in
The number of dependents that people are choosing to have is ?
joja [24]

Current demographic trends show that the number of dependents that people choose to have is <u>Decreasing</u>.

<h3>What is the trend in dependants?</h3>

A general trend that has been noticed in recent years is that people are choosing to have less dependants such as children.

The top reasons for this include more education and increased economic hardship.

Find out more on trends in population growth at brainly.com/question/521129.

#SPJ1

5 0
2 years ago
How does maggie stead make fizz in the coca cola cans?
RUDIKE [14]
<span>The fizz in coca cola cans is made up of carbon dioxide gas that is compressed. The gas is forced into soda can. The pressure is created when the gas molecules are forced into the tight space. When the can is opened the temperature and pressure changes cause the fizzing.</span>
3 0
3 years ago
During the direst part of the Great Depression, approximately ______ percent of the nation's workers was unemployed.
vova2212 [387]
29.4 percent of workers
7 0
2 years ago
Which of the following statements is true if total fixed costs decrease while the sales price per unit and variable cost per uni
Trava [24]

Answer:

D. The breakeven point decreases.

Explanation:

Breakeven point of a business is defined as the point where it's total cost and total revenues are equal, at this point there is no gain or loss. Hen revenue is above this point profit is made, and when revenue is below this point there is loss.

The formula for break-even is

Breakeven point= Total fixed cost/(Sales price per unit- Variable cost per unit)

Since sales price and variable cost is constant, let's say

(Sales price per unit- Variable cost per unit)= constant (k)

So when we cross-multiply in the formula

Breakeven* k= Total fixed cost

It shows that Breakeven point is directly proportional to Total fixed cost.

So a reduction in Total fixed cost will result in a reduction in Breakeven point.

3 0
3 years ago
Depreciating assets: a become more valuable over time. b become less valuable over time. c stay the same value. d none of the ab
NemiM [27]
Depreciating means to become less valuable over time, so I believe the correct answer is <span>b. become less valuable over time.</span>
6 0
3 years ago
Read 2 more answers
Other questions:
  • "Our business needs a steady supply of raw milk," said Beatrice Gomez, CEO of Bea's Ice Cream, "But Holly Dairy Farms is unable
    9·1 answer
  • In which situation would you opt for a car lease?
    15·2 answers
  • Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 66,00
    15·1 answer
  • Teach for america works to solve which societal problem
    10·1 answer
  • You are considering investing in a no-load mutual fund with an annual expense ratio of .6% and an annual 12b-1 fee of .75%. You
    6·2 answers
  • A firm knows that Mike’s income elasticity of demand for hair ties is 5 while for Sally it is 0.2. A firm can reason that a hair
    14·1 answer
  • The following information is from the materials requisitions and time tickets for Job 9-1005 completed by Great Bay Boats. The r
    13·1 answer
  • The price elasticity of demand for beef is about 0.60. Other things equal, this means that a 20 percent increase in the price of
    11·1 answer
  • 1. Kampman Company projects 2019 first quarter sales to be $ 20 comma 000 and increase by 5​% per quarter. Determine the project
    5·1 answer
  • Explain three types of production technology defined by James D. Thomson and discuss what kind of structure (Mechanic Vs. Organi
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!