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
77julia77 [94]
3 years ago
11

Use the information for the​ question(s) below. The Sisyphean Company has a bond outstanding with a face value of​ $1000 that re

aches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is​ 8% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is​ 7.5%, then the price that this bond trades for will be closest​ to:
Business
2 answers:
liraira [26]3 years ago
6 0

Answer:

$1,044.57

Explanation:

Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. We calculate the present value of both the coupon payment and the maturity payment.

According to given data

Face value of the bond is $1,000

Coupon payment = C = $1,000 x 8% = $80 annually = $40 semiannually

Number of periods = n = 15 years x 2 = 30 period

YTM =  7.5% annually = 3.75% semiannually

Price of the bond is calculated by following formula:

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond = $40 x [ ( 1 - ( 1 + 3.75% )^-30 ) / 3.75% ] + [ $1,000 / ( 1 + 3.75% )^30 ]

Price of the Bond = $713.17 + $331.40 = $1,044.57

yulyashka [42]3 years ago
6 0

Answer:

The price of the bond will be closest $1,0445

Explanation:

Face value $1000, years to maturity 15 years , coupon rate 8% paid semi annually, YTM 80%

Semiannual

n = 15*2 = 30

coupon payments = 8%*1000/2 = $40

YTM = 7.5%/2 = 3.75%

Value of a bond is equal the present value of coupon payments and present value of face value at maturity

Bond Price = C* [1-(1+r)^-n/r] + FV/ (1+r)^n

                  = 40 * [1-(1+0.375)^-30/0.0375] + 1000/(1+0.0375)^30

                  =713.1698 +331.4033

                  = $1,044.57

     Therefore when rounding of the price of this bond is closest to $1,0445          

You might be interested in
The consumer's level of involvement can lead to two types of buying decisions: __________ or
Olenka [21]

Answer:

The consumer's level of involvement can lead to two types of buying decisions: limited problem solving or extended problem solving

Explanation:

limited problem solving:

It is a problem solving process in which customer is only willing to put very little effort to make a purchase decision in order to fulfill his want or need. Purchaser uses simple decision rules for reaching a a purchase decision with minimal research done. He is not much concerned about the best solution and has limited resources and time for searching information and assessing each alternative thoroughly.

For example: you need a new pair of joggers for gym.  You are already have an idea about joggers and know about new available materials and attributes. So you might do a bit research online and come to a decision comparatively quickly. You might consider your favorite outlet instead of searching for the joggers at every outlet. So you take buying decision limiting involvement in this process.

extended problem solving

In this process the costumer attempts to collect as much information as possible, and thoroughly assess and evaluate product alternatives. So in this situation buyer don't have much idea about the product brands, attributes and characteristics to access the product. Purchaser will research, differentiate and put a lot of effort for taking best buying decision that will fulfill his needs. prior to purchasing the product, he might visit various outlets, research online, search for reviews and suggestions, take information from outlet staff. about the product Marketer should provide with such information to customer.

For example high value items like car, a house etc. Such items are not purchased often so the consumer will invest a lot of time in research and comparison in order  to take the best decision.

6 0
3 years ago
A broker listed a $75,000 property and the agreement read that the owner would NOT take more than a 25% cash offer. The broker p
Mashutka [201]

Answer:

The correct answer is  - No,

Explanation:

The correct answer is  - No,

The answer is no because the broker brings a buyer who is ready to give 1005 cash offer which is against the legal agreement defined by the owner. owner state that he is only taking a 25% cash offer.

Therefore the owner wouldn't consider the broker and didn't due broker commission.

8 0
3 years ago
The Racquet Store (RS) sells franchise agreements in which it charges an up-front fee of $50,000 for assistance in setting up a
andre [41]

Answer: A- Revenue under the installment sales method, as soon as it has assisted Steffi in setting up the store.

Explanation: The installment sales method is a method of accounting accepted under the US Gaap. It is a method were revenue is recorded in instalments and the cost of sales and gross profit recognised upon the collection of the installment revenue.

It is a method of accounting used mainly by construction companies whose revenue are not received once but in installments.

7 0
2 years ago
Opportunity cost is defined as A. the monetary expense associated with an activity. B. the highest valued alternative that must
Ratling [72]

Answer:

B. the highest valued alternative that must be given up to engage in an activity.

Explanation:

Opportunity Cost is the cost of next best alternative foregone while choosing an alternative.

Eg1: If I like Chapati more than rice & rice more than curd, the opportunity cost of consuming chapati is the next best option i.e rice.

Eg2 : Working as school teacher with salary 20000, next best option salary as coaching tutor i.e 10000 is the Opportunity Cost

A is inapt : Opportunity cost can be monetary or non monetary. Eg2 has monetary opportunity cost. But, Eg 1 has opportunity cost in terms of rice' (sacrifised) satisfaction.

C is inapt : Opportunity cost is only the cost of next best alternative & not all alternatives. Eg1 - Curd i.e 3rd best option after chapati, is not the opportunity cost after chapati.

4 0
3 years ago
The shareholder-debtholder conflict refers to:________
Lera25 [3.4K]

Answer:

C

Explanation:

The shareholder-debtholder conflict usually arises because shareholders would prefer the firm to engage in more risky business activities. This is because this has the potential to increase the income of the firm and as a result, the wealth of shareholders.

On the other hand debtholders would not want the firm to engage in risky activities because it might negatively affect the firm's ability to make its schedules payments to debtholders.

In order to protect themselves, debtholders usually draft a deb covenant which contains allowable activities of the firm

4 0
2 years ago
Other questions:
  • Michael is unaware that it is very important for those from Japan to establish close personal relationships before talking about
    6·1 answer
  • Western auto inc. pays a​ $1.77 preferred dividend every quarter and will maintain this policy forever. what price should you pa
    9·1 answer
  • Computer chips are a normal good. suppose the economy slips into a recession so that income falls. as a​ result, the demand for
    9·1 answer
  • Sheridan Company sells radios for $50 per unit. The fixed costs are $445000 and the variable costs are 60% of the selling price.
    7·1 answer
  • The survey that found 75% of consumers would consider going to another company after a bad customer service experience surprises
    15·1 answer
  • The purpose of a restrictive monetary policy is to:a. reduce borrowing costs b. stimulate spending curb c. rising prices and ove
    7·1 answer
  • Ou invested $4,500 in a project which gave you a return of 14.1% the 1st year. You were quite happy, but the 2nd year wasn't as
    8·1 answer
  • The George Washington University encourages students to think critically and to challenge the status quo. Thus, civil discourse
    10·1 answer
  • Wallace's Wrench Company manufactures socket wrenches.
    13·1 answer
  • T-Shirt Enterprises is selling in a purely competitive market. Its output is 300 units, which sell for $1 each. At this level of
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!