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
3 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]3 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
A person who holds him- or herself out as a specialist or knowledgeable in a certain type of business is one type of
ruslelena [56]

Answer:

Merchant

Explanation:

4 0
3 years ago
Payton Corporation provided the following information for the​ year: Beginning Balancelong dash​Work-in-Process Inventory $ 25 c
lukranit [14]

Answer:

$1,133,000

Explanation:

The computation of the cost of goods manufactured is shown below:

= Direct materials used + Direct labor cost + Manufacturing overhead cost + beginning work-in-process inventory - ending work-in-process inventory

where,

Direct material used is

= Opening balance of raw material + purchase made - ending balance of raw material

= $83,000 + $361,000 - $62,000

= $382,000

The manufacturing overhead is

= Indirect labor + Depreciation on Factory Plant and Equipment + Plant Utilities and Insurance

= $18,000 + $22,000 + $272,000

= $312,000

And, the other items would remain the same

So, the cost of goods manufactured is

= $382,000 + $469,000 + $312,000 + $25,000 - $55,000

= $1,133,000

We simply applied the above formula to determine the cost of goods manufactured

4 0
3 years ago
Determine the market potential for a backpack that has 200,000 prospective buyers who purchase an average of 2 backpack per year
LekaFEV [45]

Answer:

i.The total number of a company sell if it desires a 10% share of this market? is 40,000 units

ii. The % of the market supplies that should capture to break even is 5%

Explanation:

To calculate break even point in unit, use the formula;

Fixed Cost / Contribution Margin.

In this question, Fixed cost is the factory lease cost of one year for $400,000

Contribution margin is the difference betwen Selling Price and Variable Cost.

This will be $50-$30=$20

Therefore, Break even point in unit = $400,000 divided by $20

this will give 20,000 units.

20,000 units is 5% of the market size of (200,000X2) 400,000 units.

I.e. (20,000/400,000)X100=5%

8 0
3 years ago
A government intervenes in the marketplace when it believes that the benefits are _____ the costs. greater than less than the sa
Pavlova-9 [17]

I believe the answer is: Greater

For example, let's say that there is a company that make vehicles with no pollutant for the environment.

The government in this situation might provide the company with incentives with the reason that the amount of incentive is smaller compared to the amount of expense that the government had to spend to fix the damage to the environment.

7 0
3 years ago
If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent, the expected real interest rate is _____
goldenfox [79]

The real interest rate is simply nominal interest rate less the inflation rate. In equation form this is equivalent to:

Real interest rate = Nominal rate – Inflation Rate

Real interest rate = 9% - 4%

Real interest rate = 5%

<span> </span>

7 0
3 years ago
Other questions:
  • When the local grocery store puts cereal on sale, reducing its price from $4.40 per item to $3.40 per item, the quantity sold in
    14·1 answer
  • FICO is a credit score.<br><br> True<br> False
    12·1 answer
  • Jan is unmarried and has no children, but she provides all of the financial support for her mother, who lives in an apartment ac
    5·1 answer
  • Sales revenues are usually considered earned when an order is received. cash is received from credit sales. adjusting entries ar
    12·1 answer
  • In order to help an interviewer remember you, it is recommended to __________.
    13·2 answers
  • When the businesses within an organization share some resources and technologies and each business generates less than 40 percen
    13·1 answer
  • An example of a normative economic argument is: Group of answer choices arguing that high degrees of income inequality is ineffi
    11·1 answer
  • On October 1, 2020 Bonita Industries issued 5%, 10-year bonds with a face value of $8090000 at 103. Interest is paid on October
    10·1 answer
  • Epsilon Co. can produce a unit of product for the following costs: Direct material $ 7.80 Direct labor 23.80 Overhead 39.00 Tota
    9·1 answer
  • Helen spent the last 85 days of 2020 in a nursing home. The cost of the services provided to her was $27,625 ($325 per day). Med
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!