Any establishment formed to carry on commercial enterprises is a
1 answer:
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Answer:
YTM (Annual( = 10.13%
Effective Annual Yield =10.40%
Explanation:
In order to calculate Yield to maturity, we need to use yield to maturity formula.
Formula: Yield to maturity = [C +(F – P)/n]/(F + P)/2
Where,
C = Coupon amount
F = Face value
n = number of periods
P = Current price
Data
C = 1000 x 8 % = 80
C (6months) = 80 x 6/12 = 40
F = $1000
n = 30 years
P = $800
Solution
YTM = 40 + (1000 – 800/30)/(1000 + 800)/2
YTM = 40 + (200/30)/(1800/2 )
YTM = 40 +( 200/30)/900
YTM = 5.068 semiannual
YTM (Annual( = 10.13%
Effective Annual Yield =
Effective Annual Yield =10.40%
Cash is debit amount is, 84000. Preferred stock-$50 par value is credit, 30000. Paid in capital in excess of par-preferred is credit, 54000.
What is market value?
Market value is the amount an asset would sell for on the open market, or the estimation of an equity or company's worth by the financial community.
Date Accounts title & explanation Debit Credit
cash (600×140) 84000
Preferred stock-$50 par value, 30000
Paid in capital in excess of par-preferred, 54000
Hence, the significance of the market value is aforementioned.
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