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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).

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Answer:

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3 years ago
Help I need help with writing a article about fashion & lifestyle blogger
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3 years ago
Jameson Company uses average cost and a perpetual system. On January 1, the company had 600 units of inventory at an average cos
Leni [432]

Answer:

the average cost per unit that should be used to determine the cost of the units sold on January 28 is $ 59.00

Explanation:

The Weighted Average Cost Method calculates the new cost of Inventory with each purchase of Inventory.

The Perpetual Inventory System records the cost of inventory sold with each sale made.

<u>Calculation of  the new cost of Inventory with each purchase of Inventory :</u>

January 10:

Cost per Unit = Total Cost / Total Number of Units

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January 20:

Cost per Unit = Total Cost / Total Number of Units

Cost per Unit = (( 1600 units × $57.50 per unit ) + ( 800 units × $62 per unit )) / 2400 units

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3 0
3 years ago
Read 2 more answers
ClipClop Company sells horseshoes to customers at a discount of 4% if the customer orders more than 10,000 horseshoes in a year.
STALIN [3.7K]

Answer:

$7,680

Explanation:

The computation of the sales revenue in April month is shown  below:

= Sales revenue - discount

where,

Sales revenue = Number of horseshoes × price per shoe

                       = 4,000 horseshoes × $2

                       = $8,000

And, the discount equal to

= Sales revenue × discount percentage

= 8,000 horseshoes × 2%

= 3$20

Now put these values to the above formula

So, the value would be equal to

= $8,000 - $320

= $7,680

7 0
3 years ago
Define the term market share?
sertanlavr [38]

The part of a market controlled by a certain company or product

8 0
3 years ago
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