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LiRa [457]
3 years ago
13

Vulcan, Inc., has 7 percent coupon bonds on the market that have 13 years left to maturity. The bonds make annual payments and h

ave a par value of $1,000. If the YTM on these bonds is 8.4 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
ololo11 [35]3 years ago
3 0

Answer:

Current bond price  is $891.74

Explanation:

Coupon rate: 7%

Tenor (Nper): 13 years

Par value: $1,000

YTM (discounting rate): 8.4%

Coupon received annually (PMT) = $1,000 * 7% = $70

Current bond price  = present value of coupon received annually + present value of bond

To calculate PV of coupon received, we use excel in formula PV(discounting rate ,Nper,- PMT) = PV(8.4%,13,-70) = $541.30

or calculate manually = 70/(1+8.4%)^13+70/(1+8.4%)^12+…..+70/(1+8.4%)^1 =  $541.30

present value of bond = 1000/(1+8.4%)^13 = $350.44

Current bond price   = $541.30 + $350.44 = $891.74

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26.67

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A natural monopoly, such as a local electricity provider, is the result of long run average total costs declining continuously as output increases. The correct option among all the options that are given in the question is option "3". The initial cost of power generation and power distribution cost is high. Once the generation starts and the number of consumer increases, the average cost starts declining.
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3 years ago
When sodium chloride, NaCl , is added to water, it forms a solution. The steps involved in the dissolution of NaCl in water are
borishaifa [10]

Surely, when sodium chloride, NaCl , is added to water, it forms a solution which

is known as homogeneous solution

This dissolution of sodium chloride in water forms sodium and chloride ions

The chemical equation for the reaction is given below:

NaCl(s) + H2O(l) ⇌ Na+(aq)+Cl−(aq)

Reaction wise, when sodium chloride, NaCl , is added to water, the water molecules pull the sodium and chloride ions far apart, thereby; breaking the ionic bond that held them together. After the salt compounds are pulled apart, the sodium and chloride atoms are surrounded by water molecules

<h3>What is homogeneous solution?</h3>

Homogeneous solutions can be defined as those solutions with uniform composition and properties throughout the solution.

So therefore, surely, when sodium chloride, NaCl , is added to water, it forms a solution which is known as homogeneous solution

NaCl(s) + H2O(l) ⇌ Na+(aq)+Cl−(aq)

Learn more about homogeneous solution:

brainly.com/question/14926412

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2 years ago
Which of the following companies is an example of a manufacturer? a. H&amp;R Block b. Best Buy c. Intel d. Trism e. Walmart
Otrada [13]

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