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12345 [234]
4 years ago
13

"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

nd has three years remaining until maturity. If the prevailing annualized yield on other bonds with similar characteristics is 12 percent, how much will Stephanie pay for the bond
Business
1 answer:
Rzqust [24]4 years ago
3 0

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

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Market risk concerns with the changes occur in the financial market; corporate risk is associated with the organization itself; and standalone risk reflect the problem happen within a single department of an organization.

Here, all the three risks in regard to a portential project are breifly described:

  • Market risk reflects the effect of loss in the project due to the overall performance of the financial market. Market risk arises from fluctuations in interest rates, exchange rates, stock prices, and commodity prices.
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Of the three risks, the market risk is the most relevant because in regard to the project the market risk measures all the factors which have impact on the performance of financial markets.

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4 0
1 year ago
The liquidity of a company with significant amounts of obsolete inventory is best measured by the ______ ratio.
Mariulka [41]

<u>Answer: </u>

The liquidity of a company with significant amounts of obsolete inventory is best measured by the inventory turnover ratio.

<u>Explanation: </u>

  • Depending on how functional the inventories are, the ratios of inventory turnover would bulk or shrink.
  • To have a clear picture of the amounts of obsolete inventory, an examination of the inventory turnover ratio would help greatly as it would dispense the necessary comparative data related to all the inventories.
  • The functionality of the inventories can thus be clearly devised from the inventory turnover ratio.
7 0
3 years ago
Charmaine is a member of a junior miss organization that teaches young women how to behave in various social situations. She is
Paraphin [41]

Answer:

etiquette

Explanation:

From the question, we are informed about Charmaine who is is a member of a junior miss organization that teaches young women how to behave in various social situations. She is learning manners, how to carry herself, and appropriate attire for specific situations. In this case Charmaine is learning etiquette. Etiquette which can also be regarded as propriety could be regarded as conventional forms as well as usages. It is defined as way of observing formal requirements that is needed to behave in a polite society which could be a normal society or group of professional society.

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3 years ago
The formula to compute cash receipts or cash payments for operating cash flows using the direct method is?
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Answer:

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2 years ago
The conferences were scheduled for; October 1, November 1, and December 1. The conferences were scheduled for: October 1, Novemb
ololo11 [35]

Complete Question: in order

<em>Identify which option in the following groups is punctuated correctly</em>

1.

a. The conferences were scheduled for; October 1, November 1, and December 1.

b. The conferences were scheduled for: October 1, November 1, and December 1.

c. The conferences were scheduled for October 1, November 1, and December 1.

2

a. Working for a larger company has its advantages; consequently I have decided to stay here another year.

b. Working for a larger company has its advantages consequently, I have decided to stay here another year.

c. Working for a larger company has its advantages; consequently, I have decided to stay here another year.

3

a. The meeting started at noon: it lasted until late in the evening.

b. The meeting started at noon; it lasted until late in the evening.

c. The meeting started at noon, it lasted until late in the evening.

4

a. The company meeting is this afternoon; therefore please take a shorter lunch break.

b. The company meeting is this afternoon; therefore, please take a shorter lunch break.

c. The company meeting is this afternoon therefore, please take a shorter lunch break.

Answer:

1. option c

2. option c

3. option c

4. option c

3 0
3 years ago
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