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Alika [10]
3 years ago
9

Sunland, Inc., has issued a three-year bond that pays a coupon rate of 7.5 percent. Coupon payments are made semiannually. Given

the market rate of interest of 4.4 percent, what is the market value of the bond?
Business
1 answer:
diamong [38]3 years ago
8 0

Answer:

$1086 approx.

Explanation:

<u>Given</u>: Coupon rate 7.5 % per annum i.e 3.75% semi annually

           YTM = 4.4% per annum i.e 2.2% semi annually

           Face value: $1000 (assumed)

           No of periods to maturity =  3 years × 2 half years = 6 periods

Value of a bond is given by the following equation

B_{0} = \frac{C}{(1\ +\ YTM)^{1} } \ +\ \frac{C}{(1\ +\ YTM)^{2} } \ +.....+ \frac{C}{(1\ +\ YTM)^{n} } \ +\ \frac{RV}{(1\ +\ YTM)^{n} }

where B_{0} = Market value of bond

          C= Coupon payment each period

          YTM = Yield to maturity rate

          n= no of periods

Hence,  B_{0} = \frac{37.5}{(1\ +\ .022)^{1} } \ +\ \frac{37.5}{(1\ +\ .022)^{2} } \ +.....+ \frac{37.5}{(1\ +\ .022)^{6} } \ +\ \frac{1000}{(1\ +\ .022)^{6} }

= 5.5638 × 37.5 + 1000 × .8776

= 208.64 + 877.60

= 1086.24

Market value of the bond is $1086 approx

This means, the bond is valued above par or priced at a premium. The reason being, it's rate of coupon payments being higher than it's yield to maturity rate.

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Real GDP​ ______. A. accurately measures leisure time and life expectancy comma but does not accurately measure the general heal
professor190 [17]

Answer:

B

Explanation:

Real GDP measure total economic output by an economy in a specific geographical boundary regardless of ownership of factors of production, within a year, ceteris paribus.

Real GDP is a good indicator but is not a perfect indicator as underground economy (private tuition whereby taxes and consumption of goods and services) are not accounted for.

Real GDP does not measure Non-Material standard of living like leisure hours, health and life expectancy... It needs other indicators.

Both B and D is a bit effy as:

For D, GDP does not even measure such Non-Material SOL

For B, GDP is not 100 percent accurate on measuring household production (local production? I believe there is no such phrasing as household production as by economics, household is involved in household spending, Contributing to Consumption expenditure in Aggregate Demand.) as there are other factors like presence of underground economy that is not accounted for.

However, B seems like the most accurate ans as it still measures national output.

5 0
3 years ago
Marketing manager Ricki Stephens reviewed her marketing information system to learn who was buying her company's products and at
Rudik [331]

Answer:

Letter A is correct. <em>Data warehouse.</em>

Explanation:

Data warehouse acts as a digital data warehouse of the company, whose main purpose is to store relevant information about the organization so that through history it can provide reports that help the company in the decision making process according to the facts found.

The biggest benefits found in the database system are greater flexibility and control of information and research, and the creation of standards that correct data and coordinate and optimize system data to ensure greater effectiveness.

7 0
3 years ago
Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead ra
pantera1 [17]

Adirondack Marketing Inc.'s Factory Overhead per unit of Product A is <em>d. </em><em>$222.09</em><em> per unit.</em>

Data and Calculations:

Overhead             Total       Direct Labor Hours  DLH per Product

                                                                              A                 B

Painting Dept.      $251,700     10,200                 9                 5

Finishing Dept.         61,700      11,900                 5                 6

Totals                   $313,400     22,100                14                 11

The overhead rate for a unit of Product A in the <u>Painting Department</u> = Total overhead in the Painting Department divided by Direct Labor Hours, multiplied by <em>direct labor hours per unit</em> of Product A.

= $222.09 ($251,700/10,200 x 9)

Thus, for a unit of Product A, the overhead rate in the <u>Painting Department</u> is $222.09.

Learn more about overhead allocation at brainly.com/question/14095583

5 0
3 years ago
What account is more likely to have penalties for frequent withdrawls?
coldgirl [10]

Answer:

saving account is a very important

3 0
3 years ago
Company XYY has recently won several bids and is now discussing how to structure the staff so that every contract can be success
SSSSS [86.1K]

Answer:

Two structures that the company can use:

Functional structure: this is the most common type of organizational structure, and it might be the one that company XYY already uses.

In this structure, the firm is divided among departments that have a specific role, or function.

The most basic division would include a production department, a marketing department, a finance or accounting department, and a marketing department.

Flatarchy: a term that is a combination of the word "flat", and the word "hierarchy", it simply means "flat hierarchy".

This innovative organizational structure does not really promote a specific hiearchy or division, and instead, all employees work closely together for a common goal, in a attempt at building a more colaborative and holistic approach.

4 0
3 years ago
Read 2 more answers
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