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
Bad White [126]
3 years ago
15

A company releases a​ five-year bond with a face value of​ $1,000 and coupons paid semiannually. If market interest rates imply

a YTM of 8​%, what should be the coupon rate offered if the bond is to trade at​ par?
Business
1 answer:
djyliett [7]3 years ago
5 0

Answer:

8% coupon rate would  make the bond trade at par

Explanation:

To confirm the above ,I prepared a present value table with ytm at 8% and annual coupon at 8%, the resulting present value is $1000 the par value of the bond

Download xlsx
You might be interested in
A municipal bondholder buys a 5 percent coupon annual payment muni bond at a price of $4,900. The bond has a $5,000 face value.
AURORKA [14]

Answer:

6.4%

Explanation:

we need to divide this investor's income in two parts:

  1. dividends are not taxed = $5,000 x 5% = $250
  2. capital gains = (selling price - basis) x (1 - tax rate) = ($4,975 - $4,900) x (1 - 15%) = $75 x 85% = $63.75

total after-tax gains = $250 + $63.75 = $313.75 / $4,900 = 0.064 ≈ 6.4%

3 0
3 years ago
Help find Robert! South Carolina people help me find Robert!​
pochemuha
He’s not even lost or missing he probably ghosted you please stop sharing this and move on
5 0
2 years ago
The ____ act criminalized securities fraud and stiffened penalties for corporate fraud.
Arte-miy333 [17]
I believe this is the Sarbanes Oxley act
3 0
3 years ago
The price of notebooks is $5, and at that price consumers demand 12 notebooks. If the price rises to $7, consumers will decrease
Vitek1552 [10]

Answer:

3

Explanation:

We are asked to use the midpoint formula.

Here, instead of dividing the change in values by the old value as in the normal elasticity calculation, we use the average of the two.

Mathematically:

Price elasticity of demand according to midpoint formula is :

{Q2 - Q1 / (Q2 + Q1) ÷ 2] × 100%} ÷ {[P2 - P1/ (P2 + P1) ÷ 2] × 100}

Price changed from 5 to 7. The midpoint of 5 and 7 is the average = (5+7)/2 = 6

% change in price in this case is (7-5)/6 * 100 = 100/3 = 33.33%

% change in quantity:

We first find the average = (12+4)/2 = 16/2 = 8

% change = (4-12)/8 * 100 = -100%

The elasticity of demand is thus -100/33.33 = 3

7 0
3 years ago
Emerald Corporation, a calendar year C corporation, was formed and began operations on April 1, 2018. The following expenses wer
Lorico [155]

Answer:

Emerald’s deduction for organizational expenditures is = $4550

Explanation:

given data

Expenses of temporary director and organizational meeting is = $27,000

Fee paid to state of incorporation = 1,000

Accounting services incident = 15,500

Legal services = 9,500

Expenses incident printing and sale = 6,000

to find out

Emerald deduction for organizational expenditures

solution

first we get here total Qualifying organizational expenditures that is

total Qualifying organizational expenditures  = $27,000 + $1,000 + $15,500 + $9,500

total Qualifying organizational expenditures  = $53000

and Immediate expensing will be as

Immediate expensing = $5000 - ($53000 - $50000)

Immediate expensing = $2000

so now we get here Emerald Corporation deduction under §248 for 2018 is

Amortization = \frac{$53000-$2000}{180} × 9  

here tax in year = 9 month

Amortization = $2550

Emerald’s deduction for organizational expenditures is = $2550 + $2000

Emerald’s deduction for organizational expenditures is = $4550

3 0
3 years ago
Other questions:
  • Which aspect of culture is being addresses by an advertisement for ham that features a family enjoying dinner together??
    14·1 answer
  • __________ are not one of the types of engagements and related forms of conclusions that are defined by the attestation standard
    7·1 answer
  • Coca-Cola acquired its bottlers and created a national vertically integrated business operation in 2010. After spending 12.3 bil
    6·1 answer
  • After studying the differences between groups and teams, Devon realizes that she and the people she works with every day fall so
    15·1 answer
  • Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $47,600
    11·1 answer
  • 3M's Cubitron II, described as "an industrial abrasive that cuts faster, lasts longer, sharpens itself, and requires less elbow
    12·1 answer
  • 41 had investments in stock funds 91 had investments in bond funds 60 had investments in money market funds 47 had investments i
    12·1 answer
  • Logistics means creating an efficient assembly line.<br> A. <br> True<br> B. <br> False
    14·2 answers
  • Suppose that the price of a pound of bananas is
    11·1 answer
  • a firm is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for five years
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!