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lorasvet [3.4K]
3 years ago
15

Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $70,000 and matures in 20 years. T

he bond makes no payments for the first six years, then pays $2,800 every six months over the subsequent eight years, and finally pays $3,100 every six months over the last six years. Bond N also has a face value of $70,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 10 percent compounded semiannually.
Business
1 answer:
ziro4ka [17]3 years ago
5 0

Answer:

Bonds N present market value: $ 10,405.05

Bond M  present market value: $  36.893,9‬0

Explanation:

Bond N is a zero-coupon we discount maturity at 10%:

<u>We calculate using the present value of a lump sum:</u>

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   70,000.00

time   20.00

rate  0.1

\frac{70000}{(1 + 0.1)^{20} } = PV  

PV   10,405.05

Bond M

<u>present value of the annuity payment:</u>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 2,800.00

time 16 (8 years 2 payment per year)

rate 0.05 (10% annual becomes 5% semiannual)

2800 \times \frac{1-(1+0.05)^{-16} }{0.05} = PV\\

PV $30,345.7548

<em>Then we discount at present date using the lump sum formula:</em>

\frac{30345.7547684816}{(1 + 0.05)^{16} } = PV  

PV   13,901.74

<u>We do the same for the next annuity:</u>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 3,100.00

time 12

rate 0.05

3100 \times \frac{1-(1+0.05)^{-12} }{0.05} = PV\\

PV $27,476.0801

\frac{27476.0800729913}{(1 + 0.05)^{16} } = PV  

PV   12,587.11

Now we add the present valeu of the maturity: which is the value of the zero-coupon bond: 10,405.05

<u>Bond M present value: </u>10,405.05 + 12,587.11 + 13,901.74 = 36.893,9‬

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PackMan Corporation has semiannual bonds outstanding with nine years to maturity and the bonds are currently priced at $754.08.
Alja [10]

Answer:

b. 8.225%

Explanation:

The rate formula will be used to solve this question.

Please note that the NPER represents the time value.

Where;

Present value is $754.08

Let's assume that the face value is $1,000

PMT= 1,000 x 7.25% ÷2

=$36.25

NPER= 9 years x 2

= 18 years

The formulae is therefore

Rate(NPER,PMT,-,PV,FV)

The value of the present value is negative.

a. The pretax would therefore be 11.75%

b. After tax cost of debt would be ;

Pretax cost of debt x (1 - tax rate)

11.75% x (1 - 30%)

11.75% x (1 - 0.03)

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4 0
3 years ago
Thrill Rides is considering adding a new roller coaster to its amusement park. The addition is expected to increase its overall
zepelin [54]

Answer:

C. ticket sales for the new coaster.

Explanation:

In the case when the sales is reduced for the boat rise so the new rise would decrease the sales of the boat ride.

in the case when the food cost would be increase so if the sales of the food rises so automatically the food cost would rise

In the case when there is an extra sales for existing coaster, the same is mentioned in the given case

Therefore the option c is correct

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3 years ago
FarCry Industries, a maker of telecommunications equipment, has 2 million shares of common stock outstanding, 1 million shares o
Ulleksa [173]

Answer:

18.52%

Explanation:

Calculation for the what would be the equity weight

Using this formula

Equity weight =E÷E+P+D

Let plug in the formula

Equity weight=$2,000,000×$27÷$2,000,000×$27+$1,000,000×$14.50+$10,000×.98×$1,000

Equity weight=$14,500,000÷$78,300,000

Equity weight=.1852×100

Equity weight=18.52%

Therefore what would be the equity weight is 18.52%

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3 years ago
Sheridan Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is avai
il63 [147K]

Answer:

Closing inventory - $10,160

Costs of goods sold - $9,600

Explanation:

Under the LIFO Method, the cost of good sold equals to

= April 23 units × cost per unit + Remaining units × cost per unit

= 300 units × $22 + 150 units × $20

= $6,600 + $3,000

= $9,600

Since the firm has sold 450 units, so out of which 300 units sold at a price of $22 and the remaining 150 units sold at a price of $20

The ending inventory equals to

= Remaining units × cost per unit + April 1 × cost per unit

= 270 units × $20 + 280 units × $17

= $5,400 + $4,760

= $10,160

Since on April 23, the 420 units were purchase, out of which 150 units are transferred to the cost of good sold and the remaining units 270 units at $20 is transferred to the ending inventory

8 0
2 years ago
Is also known as oral administration.
TiliK225 [7]

Answer:

D. Ingestion

Explanation:

Absorption seems like something you would get through the skin. Injection it gets put into your body by a needle. Inhalation is through the nose. Ingestion you swallow.

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