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natita [175]
3 years ago
13

Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles,

whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with five years to maturity (YTM) has a coupon rate of 3%. The yield to maturity of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:
Business
1 answer:
Ostrovityanka [42]3 years ago
6 0

Answer:

Value of treasury Note =$698,494.97

Explanation:

<em>The value of the notes is the present value of the future cash inflows discounted at its YTM of 11%</em>

Value of Notes = PV of interest + PV of RV  

The value of Note can be worked out as follows:  

Step 1  :<em>Calculate the PV of Interest payment  </em>

Present value of the interest payment  

PV = Interest payment × (1- (1+r)^(-n))/r  

r-Yield to Maturity, n- number of years

Interest payment = 3% × $1,000,000 × 1/2= $15,000 .

Semi-annual interest yield = 11%/2 =5.5%  

PV = 15,000 × (1 - (1.055)^(-5×2)/0.055) = 113,064.3874

<em>Step 2   :PV of redemption Value</em>  

PV of RV = RV × (1+r)^(-n)  

= 1000,000 × (1.055)^(-5×2)  

= 585,430.57

Step 3  

<em>Calculate Value of the Notes </em>

=113,064.3874  + 585,430.57

= $698,494.96

Value of treasury Note =$698,494.97

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When the price of a good rises, consumers tend to purchase less of it and buy a relatively less expensive good. This behavior cr
Anna35 [415]

Answer:substitution

Explanation:The substitution bias is a weakness in the Consumer Price Index that overstates inflation because it does not account for the substitution effect, when consumers choose to substitute one good for another after its price becomes cheaper than the good they normally buy.

when the price of a product in the consumer basket increases substantially, consumers tend to substitute lower-priced alternatives.

7 0
3 years ago
The Dlabay Company had a quick ratio of 1.4, a current ratio of 2.75, an inventory turnover of 6 times, total current assets of
Gnesinka [82]

Answer:

Annual sale is $2,282,728.80 and ACP is 44.87 days

Explanation:

Since the annual sales are not given, so first we have to compute the current liabilities amount, then inventory amount, after that, only the sales amount could be found

So, the current liabilities = Current assets ÷ current ratio

                                         =  $775,000 ÷ 2.75

                                         = $281,818  

Now the quick ratio = (Current assets - inventory) ÷ current liabilities

        1.4 times          = ($775,000 - inventory) ÷ $281,818  

$394545.20 = $775,000 - inventory

So, inventory = $380,454.80

Now, the inventory turnover equals to

Inventory turnover ratio = (Turnover ÷ average inventory)

6 times = Annual sales ÷ 380454.80

So, annual sales = $2,282,728.80

The computation of the ACP is shown below:

= (Account receivable ÷ credit sales) × 360 days

Since account receivables is not given so first, we have to calculate it which equals to

= Current assets - cash - inventory  

=  $775000 - $110,000 - $380,454.80

= $284545.20

Now put these values to the above formula  

So, the value would equal to

= ( $284545.20 ÷ $2,282,728.80) × 360 days

= 44.87 days

5 0
3 years ago
Upon beginning her career at davidson inc., a small consulting firm, stephanie benjamin receives a copy of the firm's organizati
7nadin3 [17]
Upon beginning her career at Davidson inc., a small consulting firm, Stephanie Benjamin receives a copy of the firm's organization chart, which will clarify positions and reporting relationships within the firm. Correct answer: B
<span> The organization chart illustrates the relationships among positions within an organization . The chart has usual five elements: job design, departmentalization, delegation, span of management, and chain of command.</span>
6 0
3 years ago
In two to three sentences, describe the nonverbal communication in the photo below and whether it is effective or ineffective.
Rufina [12.5K]

Answer:

the nonverbal commuication being used in this photo is posture, facial expressions, and gestures. i guess you could say this is effective he looks like he would be speaking in a sturn tone of voice.

Explanation: can you answer some questions not answered on my account please

6 0
3 years ago
At December 31, 2020, Ivanhoe Corporation had a deferred tax liability of $26,800. At December 31, 2021, the deferred tax liabil
Tju [1.3M]

Answer:

$65,300

Explanation:

Ivanhoe's income tax expense = deferred tax liability 2021 - deferred tax liability 2020 + current tax expense 2020 = $42,800 - $26,800 + $49,300 = $65,300

A deferred  tax liability occurs when a corporation's income statement shows a certain amount following US GAAP, but the tax rules used by the IRS determine a different amount.

5 0
3 years ago
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