The present value of a bond equals present value of annual coupon and present value of the face value of the bond. The correct answer is A.
Explanation:
In this case, we will obtain the present value of annual coupon by discounting the coupon at the present value of annuity factor for the bond duration. We will also obtain the present value of the face value of the bond by discounting the face value at the present value factor for the bond maturity.
The Volume Variance is the difference between actual production (AP) and budgeted production (BP) for a period multiplied by the standard fixed overhead rate (SR)
Whenever actual production is less than the budgeted production the fixed overhead charged to production is less than the budgeted cost the volume variance is adverse.
Participating preferred is a stock which pays specific dividends rate to their customers and also receives additional dividends, this is made known Board of Directors and paid by the company, this meets up with the objectives a customers has for investing and having a stable income. It is so known as performance preferred and it gives the holder the benefit of collecting extra dividends.
