Answer:
The value of the bond which is the current price is $ 830.16
Explanation:
It is very vital to note that a rational investor values a bond today based on the cash flows payable by the bonds in future discounted to today's terms.
The future cash flows comprise of the yearly coupon interest of $60(6% *$1000) for 10 years as well as the repayment of the principal $1000 at the end of year 10
To bring the cash inflows today's term, we multiply them them by the discounting factor 1/(1+r)^N , where is the yield to maturity,r is 8.6% and N is the relevant the cash flow is received.
The discounting is done in attached spreadsheet leading to $ 830.16 present value today.
It is expected that the bond would be issued at discount as yield to maturity is higher than annual interest.
Answer:
arithmetic average growth rate = (10% + 3.03% + 4.62% + 3.21%) / 4 = 5.22%
we need to find the required rate or return (RRR) in the following formula:
stock price = expected dividend / (RRR - growth rate)
- expected dividend = $2.57 x 1.0522 = $2.7042
- stock price = $60
- growth rate = 0.0522
605 = 2.7042 / (RRR - 0.0522)
RRR - 0.0522 = 2.7042 / 60 = 0.045
RRR = 0.045 + 0.0522 = 0.0973 = 9.73%
geometric average growth rate = [(1.10 x 1.0303 x 1.0462 x 1.0321)¹/⁴] - 1 = 0.05178 = 5.18%
again we need to find the required rate or return (RRR) in the following formula:
stock price = expected dividend / (RRR - growth rate)
- expected dividend = $2.57 x 1.0518 = $2.703126
- stock price = $60
- growth rate = 0.0518
60 = 2.703126 / (RRR - 0.0518)
RRR - 0.0518 = 2.703126 / 60 = 0.0450521
RRR = 0.0968521 = 9.69%
Need is essential for survival, while wants are a person's desires. The 1st statement explains want and the 2nd need.
<h3>What do you understand by the term need and want?</h3>
A need is something that is required for survival (for example, food and shelter), whereas a want is something that a person would like to have.
- Frankie already has a pair of basketball shoes that he can use for the tryout, so the new pair is a <u>Want</u><u>.</u>
- The new shoes would be considered a <u>Need</u> if Frankie did not have a pair of basketball shoes for the tryout.
Therefore, the above statement explains the want and the need.
Learn more about the want and need here:
brainly.com/question/13923283
Answer:
<em>Initial Assets Valuation</em>
- Building A = $800,000
- Building B = $500,000
- Land = $700,000
Explanation:
According to the Independent Appraisal, the total value of the buildings and the land would be;
= 840,000 + 525,000 + 735,000
= <em>$2,100,000</em>
<em />
The initial valuation of the Assets therefore will be their weights according to the independent appraisal multiplied by the purchase price.
Building A
= 
= $800,000
Building B
= 
= $500,000
Land
= 
= $700,000
