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MArishka [77]
3 years ago
7

The Petit Chef Co. has 7 percent coupon bonds on the market with 9 years left to maturity. The bonds make annual payments and ha

ve a par value of $1,000. If the bonds currently sell for $1,038.50, what is the YTM?
Business
1 answer:
PilotLPTM [1.2K]3 years ago
7 0

Answer:

The YTM is 6.45%

Explanation:

Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.

Face value = F = $1,000

Coupon payment = $1,000 x 7% = $70

Selling price = P = $1,038.50

Number of payment = n = 9 years

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

Yield to maturity = [ $70 + ( $1,000 - $1,038.5 ) / 9 ] / [ (1,000 + $1,038.5 ) / 2 ]

Yield to maturity = [ $70 - $4.28 ] / $1,019.25  = $65.72 /$1,019.25 = 0.0645 = 6.45%

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Nicole owns and operates two restaurants. The revenue of the first restaurant at time t is f(t) dollars, and the revenue of the
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Answer:

F(t)=f(t)+g(t) represents the TOTAL revenue at time t.

Explanation:

f(t) is the revenue at the time t at the first restaurant.

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TOTAL revenue = f(t)+g(t)

So F(t)=f(t)+g(t) represents the TOTAL revenue at time t.

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3 years ago
Complete the following sentence. When the long run average cost (LRAC) curve has a positive slope, it implies there are:
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Answer:

It implies there are diseconomies of scale.

Explanation:

It implies there are diseconomies of scale in the industry

Because as the quantity of units output increase, the cost also increase. While in economies of scale, the slope for the LRAC will be negative, as each increase in output lowers the cost.

When this occurs, there is a lower change of monopoly in the industry, as the larger firm also faces the larger cost, so the supply tend to be more diverse.

While a, indifined negative slope will generate monopolies as their cost become lower at gerater the output.

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3 years ago
Resources tend to be allocated inefficiently when goods
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when good are free of charge

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3 years ago
g Jill has a balance of $866,000 in her retirement savings account. She expects to retire in 8 years. She will not save any addi
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Answer:

$69,378.96

Explanation:

The first step is to determine the future value of Jill's balance

FV = P (1 + r)^n

FV = Future value  

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$866,000(1.09)^8 = $1,725,559.25

the second step is to determine the future value of the balance in Bob's account

$482,000(1.09)^8 = $960,415.19

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765,144.06.  /  11.028474 = $69,378.96

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3 years ago
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