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Sladkaya [172]
2 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]2 years ago
6 0

Answer:

5.01%

Explanation:

The bond nominal yield to call is  5.01%

MakcuM [25]2 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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If you wish to accumulate $125,000 in 7 years, how much must you deposit today in an account that pays a quoted annual interest
elixir [45]

Answer:

You need to deposit $58,481.53 today.

Explanation:

a) Data and Calculations:

Future value expected = $125,000

Period of investment = 7 years

Interest rate = 11% compounded quarterly

The amount of deposit needed today to earn $125,000 in 7 years at annual interest rate of 11% is calculated as follows:

N (# of periods)  28

I/Y (Interest per year)  11

PMT (Periodic Payment)  0

FV (Future Value)  125000

Results

PV = $58,481.53

Total Interest $66,518.47

7 0
2 years ago
A thesis statement should be clearly stated and narrowly focused. True False
dolphi86 [110]

A thesis statement should be clearly stated and narrowly focused. False

5 0
3 years ago
Read 2 more answers
Why is it important for businesses to understand the role of economics?
MrRa [10]

Answer:

Business economics often handles the analysis of various costs that business firms incur. Every business always desires to minimize their costs and maximize its profits by embracing different economies of scale. Nonetheless, the firms fail to determine exact costs that are involved in the production process.

6 0
3 years ago
Dublin Inc. had the following common stock record during the current calendar year: Outstanding-beginning of year 2,600,000 Addi
larisa86 [58]

Answer:

The correct answer is 3,175,300.

Explanation:

According to the scenario, the computation of the given data are as follows:

We can calculate the number of shares by using following formula:

Number of shares = [ Outstanding + ( Additional share × Months) + ( Additional share × Months)] × 1+Dividend

By putting the value, we get

= [2,600,000 + (280,000 × 6/12) + (280,000 × 3/12)] × 1.13

= [ 2,600,000 + 140,000 + 70,000 ] × 1.13

= 3,175,300

4 0
3 years ago
Find the EAR in each of the following cases. (Do not round intermediate calculations and enter your answers as a percent rounded
inna [77]

EAR = (1 + periodic interest rate)^N - 1

<u>9.25 % Quarterly %</u>

EAR = (1+\frac{0.0925}{4})^{4}  - 1 = 0.09575 or 9.58%

<u>16.75 Monthly % </u>

EAR = (1+\frac{0.1675}{12})^{12}  - 1  = 0.1809766 or 18.10%

<u>15.25 Daily % </u>

EAR = (1+\frac{0.1525}{365})^{365}  - 1  = 0.1647053 or 16.47%

<u>11.25 Semiannually %</u>

EAR = (1+\frac{0.1125}{2})^{2}  - 1  = 0.115664 or 11.57%

4 0
3 years ago
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