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Sladkaya [172]
3 years ago
6

Jerome Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000 par value. The bond has a

6.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,050. What is the bond's nominal yield to call?
Business
2 answers:
Nastasia [14]3 years ago
6 0

Answer:

5.01%

Explanation:

The bond nominal yield to call is  5.01%

MakcuM [25]3 years ago
5 0

Answer:

5.27%

Explanation:

Step 1

Bond's current price.

Coupon rate 8.75%

YTM 6.50%

Maturity 15

Par value$1,000

Periods/year 2

Determine the bond's price

PMT/period $43.75

N 30

I/YR 3.25%

FV $1,000.00

PV = Price $1,213.55

Step 2

Using the bond current price to find the YTC

Yrs to call 6

Call price $1,050.00

Determine the bond's Yield to call

N 12

PV $1,213.55

PMT $43.75

FV $1,050.00

I/YR 2.64%

Nominal YTC 5.27%

Therefore the bond's nominal yield to call is 5.27%

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Cerrena [4.2K]

Answer: $‭1,645,379.41‬

Explanation:

The deficiency attached to the Discounted Payback period is that it stops recognizing cashflows after the project is paid off.

Year 1 discounted cash flow = 2,000,000/(1 + 10%) = $1,818,181.82

Year 2 discounted cashflow = 4,250,000 / (1 + 10%)² = $3,512,396.69

Year 3 discounted cashflow = 1,750,000/( 1 + 10%)³ = $1,314,800.90

Amount that Discounted Payback period will not recognize is;

= Cumulated discounted cash flow - Initial cost

= 1,818,181.82 + 3,512,396.69 + 1,314,800.90 - 5,000,000

= $‭1,645,379.41‬

6 0
3 years ago
The following information is available regarding the total manufacturing overhead of Molsen Company for a recent four-month peri
Sonja [21]

Answer:

$198,000

Explanation:

Calculation to determine what the total manufacturing overhead estimated for August is

First step is to calculate the Variable element

Variable element=($198,000 - $153,000)/(110,000 - 80,000)

Variable element=$45,000/30,000

Variable element= $1.50

Second step is to calculate the Fixed element

Fixed element=$198,000 - ($1.50 x 110,000)

Fixed element=$198,000-$165,000

Fixed element = $33,000

Now let compute total manufacturing overhead

Total manufacturing overhead=$33,000 + ($1.50 x 110,000)

Total manufacturing overhead=$33,000+$165,000

Total manufacturing overhead= $198,000

Therefore Using the high-low method, compute total manufacturing overhead estimated for August is $198,000

6 0
3 years ago
Which has the greatest power in unitary form of government
Scorpion4ik [409]
Do you have answer choices?
7 0
3 years ago
Here is some price information on Fincorp stock. Suppose that Fincorp trades in a dealer market. Bid Ask 55.25 55.50 a. Suppose
kobusy [5.1K]

Answer:

$55.50

Explanation:

The bid price is $55,25 is the price applicable to investors would intend to sell their investment.

The ask price is $55.50 is the price applicable to investors who wish to acquire the Fincorp stock.

The prices have been computed in such a  way that the broker will always gain, whether an investor is buying or selling his/her stake.

Conclusively, the order given to the broker to buy at market would be executed at the ask price of $55.50, not the other way round.

8 0
3 years ago
For Gundy Company, units to be produced are 5,210 in quarter 1 and 6,500 in quarter 2. It takes 1.5 hours to make a finished uni
Levart [38]

Answer and Explanation:

The preparation of the direct labor budget by quarters is presented below:

                                       <u>GUNDY COMPANY </u>

<u>                       Direct Labor Budget, June 30, 2020</u>

<u>                      For the Six Months Ending June 30, 2020</u>

<u> Particulars        Quarter 1          Quarter 2           Six months</u>

Units

produced           5,210                 6,500          

Multiply

Direct labor

time per unit       1.5 hours         1.5 hours

Total

required direct

labors                   7,815             9,750

Multiply Hourly

wage rate             $15                 $15

Total direct

labor cost           $117,225        $146,250         $263,475

4 0
3 years ago
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