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
TEA [102]
3 years ago
7

The price of a bond is equal to the sum of the present values of its future payments. Suppose a certain bond pays $50 one year f

rom today and $1,050 two years from today. What is the price of the bond if the interest rate is 5 percent
Business
1 answer:
Studentka2010 [4]3 years ago
7 0

Answer:

The correct answer is $1,000.

Explanation:

According to the scenario, the given data are as follows:

For one year

Bond pay (p) = $50

Time period (t)= 1 year

Interest rate (r) = 5%.

So, Price of bond for 1st year = p ( 1 + r)^-t

By putting the value, we get

Price of bond for 1st year = $50 ( 1 + 0.05)^-1 = $47.62

For Second year

Bond pay (p) = $1,050

Time period (t)= 2 year

Interest rate (r) = 5%.

So, Price of bond for 2nd year = p ( 1 + r)^-t

By putting the value, we get

Price of bond for 2nd year = $1,050 ( 1 + 0.05)^-2 = $952.38

So, Total price of the bond = Price of bond for 1st year + Price of bond for 2nd year

= $47.62 + $952.38

= $1,000

You might be interested in
A new client of the member firm has just opened a margin account. After account approval, the client's initial trade is an order
Aleks04 [339]

Answer:

$2,000

Explanation:

Data provided in the question

Number of shares purchased = 100 shares

Price of common stock = $25

Given percentage = 50%

Based on the above information, there is no borrowing taken place in a margin account because there is a minimum requirement to maintain $2,000 in equity and when the purchase is made lower than $2,000 so it is important to pay the amount in full and the deposits are important when it is made more than $2,000 in the case when the trade is more than $4,000

7 0
3 years ago
Beer Corporation had net income of $216,000, and paid dividends to common stockholders of $43,000 in 2017. The weighted average
Zepler [3.9K]

Answer:

21 times

Explanation:

Calculation to determine Beer Corporation's price earnings ratio

First step is to get Calculate the Earning per share ( EPS)

EPS=$216,000 ÷ $58,500

EPS= $3.69

Now let calculate the price earnings ratio

Price earnings ratio= $79 ÷ $3.69

Price earnings ratio= 21 times

Therefore Beer Corporation's price earnings ratio is 21 times

6 0
2 years ago
Which of the following is TRUE regarding unexpected expenses?
kaheart [24]

Answer:

They should be planned for.

Explanation:

Unexpected expenses include emergencies and other unforeseen costs that a person incurs in day to day activities.  These unexpected expenses must be paid for, which means resources must come from somewhere to effect the payments.

The best way to cater to unexpected expenses is to include them in the budget. Contingencies is the term used to describe funds kept aside to settle unexpected expenses. Without a contingency arrangement, unexpected expenses will affect the budget and a person's ability to pay normal bills.

4 0
2 years ago
On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses
PtichkaEL [24]

Answer:

Following are the solution to this question:

Explanation:

In all the given choices some of the data is missing so, its correct entry can be defined as follows  

Cash account $7,840

Sales discount $160

To Accounts receivable $8,000

8 0
2 years ago
pharoah company purchased 200 of the 1000 outstanding shares of sheridan company's common stock for $520000 on january 2, 2021
Anni [7]

The equity investment ( sheridan )account on December 31, 2021 is $5,20,000

As per the fair value technique, equity Investments must be stated at the fair value of the funding at the date of reporting. In this situation there is no fair value, therefore fairness Investments ought to be mentioned at buy charge.

A fair fee is an anticipated charge at which an asset is offered or offered when both the client and seller freely agree on a fee. People and corporations may additionally compare modern-day marketplace value, growth ability, and replacement value to determine the fair price of an asset.

An equity investment is a cash that is invested in an organization by means of buying shares of that organization within the stock market. those shares are generally traded on a stock exchange.

Learn more about fair value here brainly.com/question/16788537

#SPJ4

6 0
1 year ago
Other questions:
  • Name some goods and services that are provided by the government.
    9·1 answer
  • In two to three sentences, describe how making minimum payments on credit card balances increases the total cost.
    9·1 answer
  • Relatively high paid workers are reluctant to shirk because
    5·1 answer
  • Comparative advantage A. is unlikely to​ change, once it has been defined. B. may change as time passes and circumstances change
    7·1 answer
  • This month, a company receives $5,000 from a regular customer, of which $3,000 is for products delivered last month and $2,000 i
    14·1 answer
  • A company uses a behaviorally anchored rating scale (BARS) for performance appraisals, but it is finding that is at work; manage
    15·1 answer
  • Russell’s is considering purchasing $388,000 of equipment for a four-year project. The equipment falls in the five-year MACRS cl
    9·1 answer
  • Which of these government policies pursues the economic goal of equity?
    5·2 answers
  • 5. Destiny is asked if she wants to open a Macy's credit card on the spot when she is checking out.
    11·1 answer
  • Frank and Bridge Books is a book reseller that has both a heavy online presence and 30 physical bookstores. Frank and Bridge Boo
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!