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
ioda
2 years ago
12

Nine years ago the Templeton Company issued 15-year bonds with a 12% annual coupon rate at their $1,000 par value. The bonds had

an 8% call premium, with 5 years of call protection. Today Templeton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places.
Business
1 answer:
MAXImum [283]2 years ago
7 0

Answer:

12.39%

Explanation:

in order to determine the realized rate of return we need to calculate the yield to call:

YTC formula = {coupon + [(call price - market price)/n]} / [(call price + market price)/2]

YTC = {$120 + [($1,080 - $1,000)/9]} / [($1,080 + $1,000)/2]

YTC = $128.89 / $1,040 = 0.1239 = 12.39%

In this case, the investor's realized rate of return was actually higher than the expected yield to maturity (YTM = 12% since bonds were sold at face value).

You might be interested in
Expando, Inc., is considering the possibility of building an additional factory that would produce a new addition to their produ
Yuliya22 [10]

Answer:

D

Explanation:

4 0
3 years ago
Read 2 more answers
Explain the importance of the primary sector and provide an example
lesya692 [45]

Hey there, your answer is below:

The input for the secondary sector comes from the primary sector. It comprises of all the raw materials that the secondary sector needs to process and produce goods. It generates money for some nations and can be considered "cash crops" because to its importance and worldwide commerce in sustaining the secondary sector, which is growing. This covers forestry, fishing, mining, and agriculture. In contrast, the tertiary sector creates services, while the secondary sector creates manufactured items. In less developed nations, the primary sector is frequently more significant than in industrialized nations.

Thank you,

Eddie

3 0
1 year ago
_______ is not considered to be a "developing" nation. A. Brazil B. India C. China D. Japan E. Mexico
PIT_PIT [208]

Answer:

A. Brazil

Explanation:

6 0
3 years ago
Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $2,300 in investment expenses. T
Veseljchak [2.6K]

Answer:

$3500 is deductible

Explanation:

The question is not complete . Please see the solution below :

The Investment Interest expense can be set off against Net Investment income ( Interest income - Investment expenses i.e $25000-$2000=$23000) to the extent and the remaining is carried forward to the next year. so here the investment interest expense is wholly set off against the interest income i.e $3500 is deductible

4 0
3 years ago
Due Monday by 5:29pm Points 100 Submitting a file upload Available Nov 30 at 12am - Dec 7 at 5:29 pm 8 days ACG2021 - Comprehens
jarptica [38.1K]

Answer:

Explanation:

What’s the question?!

3 0
3 years ago
Other questions:
  • The _____ model suggests that managers should monitor employees’ perceptions of fairness.
    7·1 answer
  • What often happens to stock prices when a recession in the economy is in the future?
    8·2 answers
  • The following units of an inventory item were available for sale during the year. Use this information to answer the following q
    14·1 answer
  • Shamrock Shades operates in mall kiosks throughout the southwestern U.S. Shamrock purchases sunglasses from bulk discounters and
    13·1 answer
  • Brazilian Juice, a manufacturer of healthy fruit juices in Brazil, sells juice in six different countries including United State
    13·1 answer
  • Brand equity is an unofficial <br><br> A. opportunity.<br> B. trademark.<br> C. asset.<br> D. luck.
    13·1 answer
  • Assume that instead, the debtholders had negotiated a covenant based on the maximum amount of investment (so, they set a maximum
    10·1 answer
  • Indifference curves are A. concave to the origin. B. either convex or concave to the origin. C. convex to the origin. D. no spec
    9·1 answer
  • Developing nations have formed international commodity agreements (ICAs) between leading producing and consuming nations of comm
    8·1 answer
  • A city government adds streetlights within its boundaries at a total cost of $300,000. These lights should burn for at least 10
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!