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vichka [17]
3 years ago
12

Suppose that JAN Corp. will issue a new 10 year AA rated corporate bond with a coupon rate of 7.00%. The bond pays interest semi

-annually and has a face value of $ 1,000. If existing AA corporate bonds with 10 years to maturity have a yield to maturity of 5.00%, what will be the discount or premium of JAN Corp.’s bond relative to its face value. Enter you answer as a positve number. Round your final answer to two decimals.
Business
1 answer:
k0ka [10]3 years ago
3 0

Answer:

The bond was issued at a premium of $ 155.89

Explanation:

In determining whether the bond was issued at premium or discount,it is important to ascertain the price at which the bond was issued first and foremost.

In arriving the price of he bond, all of the future cash flows of the bond are discounted to present values using the discounting factor 1/(1+r)^N

Find detailed calculation in the attached.

Download xlsx
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Consider the following probability distribution for stocks A and B: State Probability Return on Stock A Return on Stock B 1 0.10
Tomtit [17]

It can be deduced that the expected rates of return of stocks A and B are 13.2% and 7.7% respectively.

<h3>How to calculate the expected rates of return</h3>

E(RA) = 0.1 (10%) + 0.2 (13%) + 0.2 (12%) + 0.3 (14%) + 0.2 (15%)= 13.2%

E(RB) = 0.1 (8%) + 0.2 (7%) + 0.2 (6%) + 0.3 (9%) + 0.2 (8%)= 7.7%

Therefore, the expected rates of return of stocks A and B are 13.2% and 7.7% respectively.

The standard deviation will be calculated thus:

Var(RA) = [0.1 (10%-13.2%)² + 0.2 (13%-13.2%)² + 0.2 (12%-13.2%)² + 0.3 (14%-13.2%)² + 0.2 (15%-13.2%)2 ] 1/2

= 1.5%

Var(RB) = [0.1 (8%-7.7%)² + 0.2 (7%-7.7%)² + 0.2 (6%-7.7%)² + 0.3(9%-7.7%)² + 0.2 (8%-7.7%)² ] 1/2

= 1.1%

Therefore, the standard deviation of stocks A and B are 1.5% and 1.1% respectively.

Learn more about rate of return on:

brainly.com/question/25821437

3 0
2 years ago
An enhancing qualitative characteristic of accounting information that refers to the financial statement users' ability to utili
Pani-rosa [81]

Answer: Comparability

Explanation:

Comparability describes information that is measured and reported in a similar manner for different companies. It helps users understand the real similarities and differences in economic activities between companies.

6 0
3 years ago
The United States taxes the domestic and remitted foreign earnings of U.S. based MNEs no matter where the earnings occurred. Thi
tamaranim1 [39]

Answer:

The correct answer is A) worldwide.

Explanation:

The concept of a global approach to tax collection is the determination of the tax burden without considering the origin of the profits reported in the tax declaration, which implies the homogenization of the tax burden that becomes effective taking into account double treaties. taxation, where information is received from other countries on the behavior of foreign branches in this regard.

5 0
3 years ago
McKinnon Enterprises owns a professional ice hockey team, the Rockford Penguins. The company sells season tickets for its upcomi
AnnZ [28]

Answer:

option (B) $640,000

Explanation:

Data provided:

Amount received =  $960,000

Total duration of a season = 6 months

Duration from January 1, 2018 to April 2018 = 4 months

Therefore,

The Deferred revenue recognized = \frac{\textup{960,000}}{\textup{6 months}}   × 4 months

or

The Deferred revenue recognized = $160,000 × 4 months

or

The Deferred revenue recognized = $640,000

Hence,

The correct answer is option (B) $640,000

4 0
3 years ago
Which of the following are exempt from licensure, as long as they meet the exemption
grigory [225]

Answer:

Child Care Facilities

Large Family Child Care Homes

Public and non-public schools

Summer day and 24-hour camps

Vacation Bible School Programs.

Explanation:

A facility that is exempted from licensing is the one that is not licenses, but is still to maintaining certain requirements held under respective authorities. They need to meet certain requirements in order to operate effectively.

There are several programs that are exempted from licensing. From the given list, they are:

  • Public and non-public schools
  • Child Care Facilities
  • Summer day and 24-hour camps
  • Large Family Child Care homes
  • Vacation Bible School Programs.

These programs are exempted from having a license but are under the obligation to meet certain requirements to run efficiently.

6 0
3 years ago
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