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wariber [46]
3 years ago
11

Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluatio

n. The firm has a bond issue outstanding with 15 years to maturity and a coupon rate of 8 percent, with interest being paid semiannually. The required simple rate of return on this debt has now risen to 16 percent. What is the current value of this bond? (Round the answer to the nearest whole number.)​
Business
1 answer:
8_murik_8 [283]3 years ago
6 0

Answer:

Current value = $550

Explanation:

You can solve this question using a financial calculator. I am using (Texas Instruments BA II plus)

First, since it is Semiannual coupon, adjust the interest rate to semi-annual rate and multiply  15 years by 2 since we have 2 semi annual periods per year.

<em>Note: If using the same calculator as me, key in the numbers first before the function .</em>

Total duration of investment ;N = 15 * 2 = 30

Interest rate; I/Y = 16% / 2 = 8%

Face value; FV = 1000

Semi annual Coupon Payment ; PMT = (8%/2)*1000 = 40

then CPT PV = $549.689

Therefore the current value of this bond is $550 (rounded to whole number.)

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The following are nine technical accounting terms introduced or emphasized in this chapter. Responsibility margin Transfer price
Ostrovityanka [42]

Answer: Please refer to Explanation

Explanation:

The terms will be listed in bold at the end of the statement. If you require further clarification please do comment.

a. The costs deducted from the contribution margin to determine the responsibility margin. TRACEABLE FIXED COSTS.

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c. Fixed costs that are readily controllable by the manager. NONE

d. A subtotal in a responsibility income statement, equal to responsibility margin plus committed fixed costs. PERFORMANCE MARGIN.

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5 0
3 years ago
If you were starting a new business, describe at least three departments to the company that you would need right away. Why are
Natali [406]

Answer:

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7 0
3 years ago
I’ll give 20 points to the best answer !!!
elena-14-01-66 [18.8K]

Answer:

The answer is "Slide Master View"

Explanation:

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3 years ago
Baker Corp. is required by a debt agreement to maintain a current ratio of at least​ 2.5, and​ Baker's current ratio now is 3. B
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Answer:

$1.67 Million

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Current liabiltiy = 15 Million/3

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Therefore, $1.67 Million inventory can Baker purchase without violating its debt agreement if their total current assets equal​ $15 million

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