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Semmy [17]
3 years ago
8

An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of in

terest is 5%, what is the current market value of the bond
Business
1 answer:
marysya [2.9K]3 years ago
3 0

Answer:

Value of the bond = $862.013

Explanation:

The value of the bond is the present value of the future cash receipts expected from the bond. The value is equal to present values of interest payment and the redemption value (RV).

Value of Bond = PV of interest + PV of RV

The value of the bond 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

Interest payment = $40

PV = 40 × (1 - (1.05)^(-12×2)/0.05)

= 40 × 13.7986

= 551.945

Step 2

<em>PV of redemption Value </em>

PV of RV = RV × (1+r)^(-n)

= 1000 × (1.05)^(-12×2)

= 310.067

Step 3

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

= 551.94567 + 310.067

=862.01

Value of the bond = $862.013

 

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Answer:

Which of the following is NOT a step in the strategic planning process?

E) evaluating all members of the value chain

Explanation:

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy

4 0
3 years ago
Riverbed Corporation issued 1,900 shares of $10 par value common stock upon conversion of 950 shares of $50 par value preferred
masya89 [10]

Answer:

The answer is given below;

Explanation:

 Preference stocks  950*50    Dr.$47,500

 Paid in capital in excess of par-preference shares  Dr.$  13,300                                  

 (64-50)*950

  Common Stocks  1,900*10        Cr.$19,000

  Paid in capital in excess of par-common stocks    Cr.$41,800

   (64*950)-(1900*10)                                        

8 0
2 years ago
What did stan uris do after he received a phone call from mike?
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5 0
3 years ago
Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's, a Taco Bell, and a Kentucky Fried Chick
astra-53 [7]

Answer:

True

Explanation:

A more precise way to describe the situation is that Joe's pizza parlor is a monopolistic competition. But that definition considers that all 'food' items have some degree of close substitute relation.

But yes, if you consider this two conditions:

  1. a broad definition of monopoly
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Then yes, Joe has monopoly

5 0
3 years ago
The gross pay, benefits and job expenses for two different employees are shown below. Employee A: gross pay $57,200, employee be
Lemur [1.5K]

Answer:

a. The total employment compensations for the two employees are the same

Explanation:

Employee compensation refers to payment made to employees by an organization in consideration for the services rendered.

Employee compensation can be in cash form such as salary and wages, perquisites, allowances, incentives, commission, etc.

In the given case,

<u>Compensation for Employee A</u>:

= Gross Pay + Employee benefits - Job expenses

= $57200 + 5300 - 800

=  $ 61,700    

Similarly,

Compensation for Employee B:

= Gross Pay + Employee benefits - Job expenses

= $56,900 + $6200 - $ 1400

= $61,700

Thus, employment compensation for both A and B are the same.

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3 years ago
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