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
OlgaM077 [116]
3 years ago
15

The 5.3 percent bond of Dominic Cyle Parts has a face value of $1,000, a maturity of 12 years, semiannual interest payments, and

a yield to maturity of 6.12 percent. What is the current market price of the bond?
Business
1 answer:
givi [52]3 years ago
7 0

Answer:

$936.17

Explanation:

The current market price of the bond = present value of all coupon received + present value of face value on maturity date

The discount rate in all calculation is YTM (6.12%), and its semiannual rate is 3.06%

Coupon to received semiannual = 5.3%/2*$1000= $26.5

We can either calculate PV manually or use formula PV in excel to calculate present value:

<u>Manually:</u>

PV of  all coupon received semiannual = 26.5/(1+3.06)^1 + 26.5/(1+3.06)^2....+ 26.5/(1+3.06)^24 = $445.9

PV of of face value on maturity date = 1000/(1+6.12%)^12 = $490.27

<u>In excel:</u>

PV of  all coupon received semiannual =  PV(3.06%,24,-$26.5) = $445.9

PV of of face value on maturity date = PV(6.12%,12,-$1000) = 1000/(1+6.12%)^12 = $490.27

The current market price of the bond  = $445.9 + $490.27 = $936.17

Please excel calculation attached

Download xlsx
You might be interested in
Last year, Valley Manufacturing reported sales of $800,000, net operating income of $40,000, and average operating assets of $40
Elza [17]

Answer:increase, 10%, 12%

Explanation:

7 0
2 years ago
A liquidated damage provision will be enforced when: a technical breach of contract has occurred without causing any actual loss
ziro4ka [17]

Answer:

the amount specified is reasonable and actual damages are difficult to determine.

Explanation:

Liquidated damages provision is a contract that is drawn up between parties in a transaction. It defines the damages that will be paid by a party for non performance in a contractual agreement.

The liquidated damages provision is enforceable when a contract is breached and it is difficult to determine the amount of actual damage done. The next option will be to use the stated amount in the contract so far it is reasonable.

7 0
3 years ago
Coaster manufactures and sells logging equipment. Due to the nature of its business, Coaster is unable to reliably predict bad d
RoseWind [281]

Answer:

$1,120,000

Explanation:

As per the installment-sales method of accounting, we first calculate the gross profit % and then apply this % to the total amount collected in sales by the end of the period. The calculations are as follows.

Sales                                                                         $7,200,000

Less: Cost of sales                                                   ($4,800,000)

Gross profit                                                               $2,400,000

Gross profit % ($2,400,000 / $7,200,000)             33.33%

Down payment (20% x $7,200,000)                       $1,440,000

Installments during 2014                                          $1,920,000

(80% x $7,200,000 x 4/12)                                

Total amount collected                                             $3,360,000

Gross profit recognized (33.33% x $3,360,000)     $1,120,000

7 0
3 years ago
The outputs of a computerized accounting information system are called A. reports. B. software. C. processing. D. purchase invoi
Zinaida [17]

Answer:

Option A

Explanation:

In simple words, The numerous outputs of an accountancy information systems demonstrate the platform's flexibility in data processing. Accounts receivable ageing reports based on user knowledge, amortization plans for capital assets, and trial balancing for financial statements are all produced by an AIS.

This, from the above we can conclude that the correct option is A.

4 0
3 years ago
On March 3, Sheridan Company sells $707, 700 of its receivables to National Factors Inc. National Factors Inc. assesses a servic
jarptica [38.1K]

Answer: The answer is given below

Explanation:

From the question, we are informed that on March 3, Sheridan Company sells $707, 700 of its receivables to National Factors Inc. National Factors Inc. assesses a service charge of its receivables to Western Factors Inc. Western Factors Inc. assesses a service charge of 5% of the amount of receivables sold.

The entry on Sheridan Company books to record the sale of the receivables has been prepared and attached. It should be noted that the service charge expense was calculated as:

= 5% × $707,700

= 0.05 × $707,700

= $35,385.

Other information has been attached.

6 0
3 years ago
Other questions:
  • About how many containers will be recycled if 125 people attend a concert?<br><br>it math
    13·1 answer
  • Aryn is a music fan, and she enjoys learning about how speakers and sound systems are wired. She is reading books
    5·1 answer
  • Suppose the economy begins at potential output when there is a severe and long-lasting stock market crash. In the short run we w
    13·1 answer
  • As Nick walks into Mesa Cycles, a local bike shop, he feels at ease owing to the decent lighting and soothing background music o
    15·1 answer
  • Find the difference in height between the top of a hill 973 feet high and a crack caused by an earthquake 79 feet below sea leve
    5·1 answer
  • True or False
    6·2 answers
  • Mandy Feng employs Jay Johnson at a salary of $35,000 a year. Feng is subject to employer Social Security taxes at a rate of 6.2
    10·1 answer
  • On September 18, 2019, Rose Company purchased 6,000 shares (9%) of Wozniak, Inc. stock for $28 per share. The market value per s
    5·1 answer
  • Consumption expenditures $800 Investment expenditures 200 Government purchases 300 Exports 100 Imports 100 Wages 800 Consider th
    12·1 answer
  • You have just been elected to public office and you have been informed that the government does not have money to pay all of its
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!