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4 years ago

Which of the following statements is CORRECT?

Business

2 answers:

dangina [55]4 years ago

6 0

Answer:

D) If a coupon bond is selling at par, its current yield equals its yield to maturity, and its expected capital gains yield is zero.

Explanation:

A bond's yield to maturity is the total interest that the bond should yield if you held it until maturity date. The yield to maturity is expressed as an annual rate of return.

If the bond is selling at par, it means that it is selling at face value, so the bond's coupon is equal to the bond's yield to maturity.

If you buy a bond at discount, then you will have a capital gain (purchase price < par value) and that capital gain should yield an interest. But in this case, since you bought the bond at par, then you will not have any capital gains.

agasfer [191]4 years ago

3 0

Answer:

D, If a coupon is selling at par, its current yield equals its yield to maturity, and its expected capital gains yield is zero.

Explanation:

The yield of a bond is the same as its yield to maturity in that the yield to maturity of any bond is a function of the growth of the economy. The yield ot maturity of any bond is the bond's rate of return which is the return that investors will receive should all the promised payments be made.

Cheers

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If small samples can reveal something that large samples might not, why not just take small samples in every situation?

swat32

Taking small samples in every situation is not always appropriate. If the populations are very large, you cannot just take small samples because it will not represent the entire population. Small samples are usually for verifications purposes that is the reason why it can detect some errors that the larger samples cannot.

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4 years ago

Mario is thinking of opening a restaurant and wants a list of other restaurants in his targeted neighborhood. mario could easily

MA_775_DIABLO [31]

Mario could easily have a list of other restaurants in his targeted neighborhood through interviews and surveys. Using this type of data collection will ensure him of qualitative data. In addition to the list of names, he will also know the profitability of opening a restaurant based on his interview.

6 0

4 years ago

Lindy's Flowers, Etc. purchased a delivery van for $60,000. The company was given a $4,000 cash discount by the dealer, and paid

zepelin [54]

Answer:

debit the van account with $63,000

Explanation:

The Lindy's cost of the van is analyzed below:

Delivery van invoice price $60,000

discount ($4,000)

sales tax $5,000

cost of logo and advertising $2,000

annual insurance cost $0

Cost of the van $63,000

The sales tax is included as it cannot be reclaimed from the relevant tax authority.

Cost of logo and advertising even though looks like a revenue expense that should not be capitalized,but in actual terms is a cost incurred to bring asset to current position of being able to be recognized as belonging to Lindy's Flowers.

3 0

3 years ago

Hagelin Co. wants to issue new 15-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon

Natasha2012 [34]

Answer:

YTM 7.02%

Explanation:

we will calcualte the YTM of the current bonds to know the market rate.

Issuing the bonds at this rate will put them at par value.

The YTM is the one which mades the future coupon payment and maturity equal to the market price.

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

Coupon payment: 1,000 x 8%/2 = 40

time 30 (15 years x 2 payment)

$40 \times \frac{1-(1+r)^{-30} }{r} = PV\\$

PV coupon

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

Maturity 1,000.00

time 30.00

$\frac{1000}{(1 + r)^{30} } = PV$

PV maturity 355.24

PV coupon + PV maturity = 1,090

For maths reason the only way to solve for rate is with trial and error

we can, however use excel to do it more quickly than by hand:

we write on A1 cell 0.1

en on B1 cell: =PV(A1,30,40)

on C1 cell= 1,000/power(1+A1;1/30)

on D1 =B1+C1

What we are doing is expressing the formulas on excel

then we use goal seek on D1

w e want it on 1090 cahnging the cell A1 which is the rate

this give us the semiannual rate of :

0.035100422

we multiply by 2 to get the annual rate:

0.070200843

YTM = 7.02%

we need to issue the bond at this rate.

8 0

4 years ago

The first year of operations for a company was Year 1. The net income for Year 1 was $20,200 and dividends of $12,100 were paid.

Mekhanik [1.2K]

Answer:

$37,200

Explanation:

The amount of retained earnings is calculated by using the formula below;

Amount of retained earnings = Net income - Dividends paid

In year 1, the amount of retained earnings

= $20,200 - $12,100

= $8,100

In year 2, the amount of retained earnings

= $34,200 - $5,100

= $29,100

Therefore, the amount of retained earnings at the end of year 2

= Amount of retained earnings for year 1 + Amount of retained earnings for year 2

= $8,100 + $29,100

= $37,200

8 0

3 years ago