1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
aliya0001 [1]
3 years ago
10

Crossfade Corp. has a bond with a par value of $2,000 that sells for $1,902.14. The bond has a coupon rate of 6.48 percent and m

atures in 12 years. If the bond makes semiannual coupon payments, what is the YTM of the bond?
Business
1 answer:
Virty [35]3 years ago
8 0

Answer:

yield to maturity = 7.06%

Explanation:

yield to maturity (YTM) is calculated using the following formula:

YTM = {C + [(FV - PV) / n]} / [(FV + PV) / 2]

  • FV = $2,000
  • PV = $1,902.14
  • C = $2,000 x 6.48% x 1/2 = $64.80
  • n = 12 x 2 = 24

YTM = {64.80 + [(2,000 - 1,902.14) / 24]} / [(2,000 + 1,902.14) / 2] = (64.80 + 4.0775) / 1,951.07 = 0.0353 or 3.53% semianually or 7.06% annually

Since the bond sells at a discount, its yield to maturity will be higher than the coupon rate.

You might be interested in
That afternoon, you meet with the owners privately to discuss the data you received. Which of the factors analyzed do you think
Kazeer [188]

Answer:

From the information from the remaining part of the question. The factor that would affect the success or failure of Caffè Gustoso is the Cultural factor.

Explanation:

Caffè Gustoso an Italian word meaning "Tasty coffee". This tells us that the firm is in the food and beverage industry.

Each of the countries mentioned are found in different continents having diverse cultures.

Key to their success is to know the culture of these countries as regards to coffee.

4 0
2 years ago
Portside Watercraft uses a job order costing system. During one month Portside purchased $173,000 of raw materials on credit; is
Nadya [2.5K]

Answer:

One parent organism and no egg or sperm

Explanation:

5 0
3 years ago
The net present value (NPV) method estimates how much a potential project will contribute to
Alex777 [14]

This answer requires that we fill in the blanks. The answers are contained in the bullet to fill the missing places

  • shareholder wealth
  • larger the NPV
  • higher stock price.
  • WACC
  • accept the project.
  • higher positive NPV.

<h3>What is the NPV?</h3>

This is the term that is used to refer to the net present value. This is the value that is calculated as the difference between the cash inflows and out flows for over a time period.

In order to get the NPV we have to make the following calculations for the projects A and B.

We have:

<u>For Project A</u>

-900 + 620/1.08 + 395/1.08² + 200/1.08³ + 250/1.08⁴

= $355. 237

<u> project B</u>

we would have

-900 + 620/1.08 + 395/1.08² + 200/1.08³ + 250/1.08⁴

= 378.98

The value for the project B happens to be greater than that of A hence this is the value that we have to accept

Read more on NPV here:

brainly.com/question/17185385

#SPJ1

4 0
2 years ago
Suppose Stark Ltd. just issued a dividend of $1.59 per share on its common stock. The company paid dividends of $1.25, $1.33, $1
Harlamova29_29 [7]

Answer:

The answer is below

Explanation:

a) The dividend growth rate is given as D2/D1 - 1

Year            Dividend                        Growth rate

1                    $1.25                            

2                   $1.33                       ($1.33/ $1.25 - 1) 6.4%

3                   $1.4                          ($1.4/$1.33 - 1) 5.26%

4                   $1.51                         ($1.51/$1.4 -1)  7.86%  

       

The arithmetic average growth rate is the average of all the growth rates.

Arithmetic average growth rate = (6.4% + 5.26% + 7.86%) / 3 = 6.51%

The cost of annuity = (cost of common stock / Selling stock price) * 100% + Average growth rate

The cost of annuity = ($1.59 / $40) * 100% + 6.51% = 10.49%

b) The geometric growth rate is given as:

geometric average growth rate =

(\frac{D_n}{D_o} )^{\frac{1}{n} }-1\\D_n=1.51,D_o=1.25,n=3\\\\Geometric\ growth\ rate=\frac{1.51}{1.25}^{1/3}-1=6.5\%

The cost of annuity = ($1.59 / $40) * 100% + 6.5% = 10.48%

7 0
2 years ago
When competing against other energy drinks like Red Bull and Monster, 5-Hour Energy is thinking through how to get its brand to
notsponge [240]

Answer:

promotion

Explanation:

8 0
2 years ago
Read 2 more answers
Other questions:
  • Maertge airlines purchases an aircraft for $84,000,000 on january 1, 2016. the residual value of the aircraft is estimated at $7
    8·1 answer
  • What might you find out an about people who are described as credit risks
    15·1 answer
  • Lightwire Co. made the decision a decade ago to make the copper wires it needs for its products in house rather than outsourcing
    11·1 answer
  • Coronado Industries uses job order costing for its brand new line of sewing machines. The cost incurred for production during 20
    12·1 answer
  • List any 5 important of wetland​
    5·1 answer
  • Sally lee, the engineering manager, delegates tasks as a good manager should. However, mark hayes, the engineering director, has
    15·1 answer
  • The marginal tax rate for a lump-sum tax a. is always positive. b. is zero. c. can take on any value but must be greater than th
    9·1 answer
  • Mhanifa Can you type here ^~^
    7·2 answers
  • Question 2
    7·1 answer
  • Does a monthly fixed-rate mortgage payment change?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!