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
butalik [34]
3 years ago
9

Wesimann Co. issued 13-year bonds a year ago at a coupon rate of 8.5 percent. The bonds make semiannual payments and have a par

value of $1,000. If the YTM on these bonds is 6.8 percent, what is the current bond price?
Business
2 answers:
4vir4ik [10]3 years ago
5 0

Answer:

$1,137.94

Explanation:

<em>The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).</em>

Value of Bond = PV of interest + PV of RV

The value of bond for Wesimann Co be worked out as follows:

Step 1

<em>PV of interest payments</em>

Semi annul interest payment

= 8.5% × 1000 × 1/2

= $42.5

Semi-annual yield = 6.8/2 = 3.4 % per six months

Total period to maturity (in months)

= (2 × 12) = 24 periods (Note it was issued a year ago)

PV of interest =

PV = A × (1-(1+r)^(-n))/r

r-3.4 %- n- 24

42.5 × (1- (1+0.034)^(-2× 12)/0.034)

=$689.70

Step 2

<em>PV of Redemption Value</em>

= 1,000 × (1.034)^(-2× 12)

= 448.236

Step 3

Price of bond

= 689.70 + 448.23

= $1,137.94

guajiro [1.7K]3 years ago
5 0

Answer:

Current Price of the bond is $1,137.94

Explanation:

Price of a bond equals present value of coupon payments and the present value of face value at maturity

Face value = $1000

years to maturity equals to 12 years since the bond was issued a year ago and had 13 years to mature and payments are made semiannual = 12*2 =24

coupon payment since coupons are paid semiannual

1000*8.5/2=$40.25

YTM = 6.8%/2 = 3.4%

bond price = C * [1-(1+r)^-n / r) + FV/ (1+r)^n

                  =42.5 * [ 1-(1+0.034)^-24/0.034] + 1000/(1+0.034)^24

                  =689.7046 + 448.2363

                  =$1,137.94

You might be interested in
g purchased a 25% stake in for $486,000 on Jan 2, 2021. On Jan 1, 2021, Satisfactory had a book value of equity on its balance s
stepladder [879]

Answer:

Perfection records in it's books an Investment in Associate of $486,000

Explanation:

Hi, your question has missing information, i tried to look for the full question online but I could not find it.

However, I have prepared below explanation to the problem.

When a firm has investments into another firm of less than 50% voting rights in stake but greater than 20% we say that firm has significant influent in the investee. The firm is said to have an Investment in an Associate.

Investments in Associates are always recorded using the Equity Method of Accounting.

<u>Entries for Investment in Associate are :</u>

Debit :Investment in Associate ($1,944,000 × 25%) $486,000

Credit : Share of profits of associate $486,000

Conclusion :

Perfection records in it's books an Investment in Associate of $486,000

4 0
3 years ago
On July 31, the bookkeeping account Supplies Inventory shows a debit balance of $1,000. A physical inventory taken on that date
Tanya [424]

Answer:

$200

Explanation:

When Supplies inventory are purchased, a debit is posted to Supplies inventory and a credit to cash account or accounts payable.

As the inventories are used, debit Supplies expense and credit Supplies inventory account.

Given that $1,000 was the debit in the books and $800 per count, it means the books balance needs to be written down to the physical balance. The difference to be posted

= $1,000 - $800

= $200

This will be done by

Debit Supplies expense  $200

Credit Supplies Inventory  $200

Being entries to record inventory used in July

4 0
3 years ago
Amanda looked up at the scoreboard and exclaimed, "Wow, that is so vivid and fantastic. I don't know what that cost, but it is a
Neko [114]

Answer:

Electronic equipment

Explanation:

Throughout history, sport has evolved while society has done it. Both at a professional or elite level and at an amateur level, the sport has undergone several revolutions, some of them due to technological inventions.

There is no sport that has not undergone a technological revolution, one way or another. Some, like basketball, have been more prone in this regard, while others have been sidelined. But without a doubt, nobody escapes the tentacles of innovation.

Technology in sports has been included to apply its rules more easily, be more objective, and improve the accuracy of the sport. They are tools that facilitate the practice of sport.

3 0
3 years ago
In the heading of a cover letter, which of the following formats should be used for the date?
loris [4]
<span>It should be laid out like this example:(November 10, 2015)</span>
7 0
3 years ago
The liaison role of a manager encompasses relationships with subordinates, including communication and influence, whereas the le
Paul [167]

Answer: False

Explanation: Managers act as liaisons when making contacts with people outside of their area of responsibility, both inside their organization and outside in the world at large. Being a liaison involves networking, but it is far more than just amassing the most friends on your profile. It is about linking people with resources. What do resources mean in the context of the liaison role? Resources could be other people, money, information, space, influence, or goods and equipment.The challenging role of the manager is accountable to senior executives for performance and to front-line employees for guidance, motivation, and support. It is common for managers to feel as if they are pulled between the demands of top leaders and the needs of the individuals performing the work of the firm.Managers then schedule activities that will lead to achieving those goals. Leaders tend to be more strategic: they must become problem solvers able to see the big picture while also identifying specific things that affect overall success.

3 0
3 years ago
Other questions:
  • Compare and contrast the views of big business and conservationists on the use of natural resources
    15·1 answer
  • Consider how McKnight Valley River Park Lodge could use capital budgeting to decide whether the $ 11 comma 500 comma 000 River P
    12·1 answer
  • Salespeople who love their products, and possess vast product knowledge, sometimes overload their customers with product data th
    12·1 answer
  • Janitor Supply produces an industrial cleaning powder that requires 48 grams of material at $0.10 per gram and 0.15 direct labor
    11·1 answer
  • Complete the balance sheet and sales information in the table that follows for J. White
    5·1 answer
  • Blank (deleted) nothing to answer...
    10·1 answer
  • Emma is a marketing manager at a multinational corporation. She gets anxious when her job gets stressful, and she tends to get a
    13·2 answers
  • Help <br> Need for a test
    6·1 answer
  • The overall process of building and maintaining profitable customer relationships by delivering superior customer value and sati
    13·1 answer
  • Adams, Inc. has sales of $100,000 with a contribution margin of $60,000 and net income of $20,000. Baron, Inc. has sales of $110
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!