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Lyrx [107]
3 years ago
10

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annua

l coupon payments. Suppose a German company issues a bond with a par value of €1,000, 23 years to maturity, and a coupon rate of 3.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Business
1 answer:
krok68 [10]3 years ago
8 0

Answer:

Bond Price = 875.0948 euro rounded off to 875.09 euro

Explanation:

To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = 1000 * 0.038 = 38 euro

Total periods (n)= 23

r or YTM = 0.047 or 4.7%

The formula to calculate the price of the bonds today is attached.

Bond Price = 38 * [( 1 - (1+0.047)^-23) / 0.047]  +  1000 / (1+0.047)^23

Bond Price = 875.0948 euro rounded off to 875.09 euro

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Accelerated Finance is deciding whether to purchase new accounting software. The cost of the software package is $ 67 comma 000​
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Answer:

The answer is: Expected annual net cash savings are $16,750.

Explanation:

Please find the below for detailed explanations and calculations:

Payback period is defined as the time it takes an investment to recover its initial investment.

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3 0
3 years ago
what is a basic premise of the acquisition method regarding accounting for a noncontrolling interest?
miv72 [106K]
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A) Consolidated financial statements should not report a non controlling interest balance because these outside owners do not hold stock in the parent company.
B) Consolidated financial statements should be primarily for the benefit of the parent company's stockholders.
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D) A subsidiary is an invisible part of a business combination and should be included in its entirety regardless of the degree of ownership.
7 0
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Above condition gives us equilibrium price & quantity.

If market price < equilibrium price, as given case 15 < 20. Then, supply being directly related to price is lesser, demand being inversely related to price is higher. So, there is a situation of excess demand, ie <u>shortage </u>(graphically denoted by distance between demand & supply curve at actual price below equilibrium price)

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