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Irina-Kira [14]
3 years ago
9

Find the price of a corporate bond maturing in 5 years that has a 5% coupon (annual payments), a $1,000 face value, and an AA ra

ting. A local newspaper's financial section reports that the yields on 5 year bonds are: AAA = 6%, AA = 7%, and A = 8%.
Business
2 answers:
zepelin [54]3 years ago
6 0

Answer:

$917.99

Explanation:

BP = Sum of discounted annual coupon payment + discounted face value

Coupon = 1000 × 0.05 = $50

The bond is AA reted so we use the 7% yiled

Sum of coupons

50/1.07)^1 +50/(1.07)² + 50/(1.07)³ + 50/ (1.07)^4 + 50/ (1.07)^5

=$205

Discounted face value =1000/ 1.07^5

=$712.98

BP = 205 + 712.99

    =$917.99

Ainat [17]3 years ago
3 0

Answer:

$917.996

Explanation:

First, we calculate price:

Price = 5% * 1000 = $50.

At the fifth year, Price = $1000 + $50 = $1050

The price of the Corporate bond is given as:

50/(1+.07) + 50/(1+.07)² + 50/(1+.07)³ + 50/(1+.07)⁴ + 1050/(1+.07)^5

= 917.9960512810481

=$917.996 ---- Approximated

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All of the following are positive outcomes of employee development except: Group of answer choices development enhances the orga
Lilit [14]

Answer:

development enhances the organization's capacity to control environmental forces

Explanation:

Employee development can be described as when an employer takes certain certain steps to increase the skills, competences and knowledge of the employees.

Employee development can take the form of :

  • trainings
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  • job rotations

Advantages of  employee development includes :

  1. It reduces employee turnover
  2. It increases the skills of employee
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7 0
3 years ago
A share of Citigroup stock represents:a.An IOU, or promise to pay, from Citigroup b.A right to require that Citigroup pays all p
valkas [14]

Answer:

A share of Citigroup stock represents a claim on Citigroup's assets that gives the purchaser a share of the corporation.

Depending on whether you are an investor or the corporation, a bond is more or less riskier than a stock.

If you are an investor, buying a bond is safer than buying stock since in a worse case scenario where the company goes bankrupt, bond holders are paid before than stockholders. Also bonds provide fixed periodic payments (coupons) and a final payment of the face of the bond at maturity date.

If you are the corporation, issuing bonds is riskier than issuing stock since you have the obligation of making fixed periodic payments to bondholders (coupons) and must pay the face value at maturity date. On the other hand corporations don't have any legal obligation to pay dividends.

6 0
4 years ago
Over a long period of time Sears has slipped from being America's largest retailer to struggling for survival in recent years. W
Kaylis [27]

Answer:

I think Sears need to stop diversifying its product too much and focus on improving internal human resources.

Explanation:

The largest expense that Sears made occurred during their effort to add more female customers to shop at their place.

Sears was known for  its DieHard, Craftsman and Kenmore brands that attract mostly male customers to their stores. They started “The Softer Side of Sears”  which focused on adding more products for female customers.

But, in the process of doing so, Sears neglected their already successful male products department with a lot of employees who sacrifice a lot of their time and effort into making Sears as big as it is.

In order to restore to its former glory, Sears need to stop focusing on new market with a lot of strong competitors and focused on improving skill set of employees in their successful department. They can do this by investing in their education, increasing the budget for their research and development, etc.

4 0
4 years ago
Three $1,000 face value, 10-year, noncallable, bonds have the same amount of risk, hence their YTMs are equal. Bond 8 has an 8%
Agata [3.3K]

Answer:

step by step Explanation:

8 0
3 years ago
Charleston Company has two departments (Processing and Packaging) and uses a job-order costing system. Charleston applies overhe
olga_2 [115]

Answer:

$1.236= Estimated manufacturing overhead rate

Explanation:

Giving the following information:

Processing:

Direct labor cost= $44,500

Applied overhead= $55,000

To determine the estimated overhead rate, we need to use the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

55,000= Estimated manufacturing overhead rate*44,500

55,000/44,500= Estimated manufacturing overhead rate

$1.236= Estimated manufacturing overhead rate

3 0
4 years ago
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