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Vedmedyk [2.9K]
3 years ago
10

Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 years. T

he bond makes no payments for the first six years, then pays $900 every six months over the subsequent eight years, and finally pays $1,300 every six months over the last six years. Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 5.4 percent compounded semiannually. What is the current price of Bond M and Bond N
Business
1 answer:
eduard3 years ago
7 0

Answer:

The price of the bond is $ 21,541.53  

Explanation:

The price of the bond is the present value of all cash inflows expected from the bond throughout the bond's life.

The cash inflows comprise of coupon interest interest payments as well as the repayment of the principal amount(the face value of $20,000) at redemption.

The present value is computed by multiplying the cash inflows by the discount factor.

The formula for discounting factor =1/(1+r/2)^t

r is the required yield of 5.4% divided by 2 since the coupon is payable twice a year.

Find attached.

Download xlsx
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Bakers are much likely to supply pastries to the market if property rights are not enforced. True or false?.
In-s [12.5K]

The statement bakers are much likely to supply pastries to the market if property rights are not enforced is <u>false</u>.

<h3>What is property rights? </h3>

Property rights can be defined as the right given to person to own and use their property they way they like or wish to use it.

The statement is not true because bakers are much likely to supply their pastries to the market if property rights are enforced.

Therefore the statement bakers are much likely to supply pastries to the market if property rights are not enforced is <u>false</u>.

Learn more about property right here:brainly.com/question/913138

brainly.com/question/22370263

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6 0
2 years ago
According to the rational choice decision-making process, the first step in solving this problem would be:
ser-zykov [4K]

Answer:

The correct answer is: identifying the problem or opportunity.

Explanation:

Identifying the problem or opportunity is the first step in the rational decision-making process. To know which direction the firm is going to take, the main issue must be pointed out so based on the possible solutions the company can provide, the first steps can be taken towards achieving the solution.

4 0
3 years ago
Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent. $200
PIT_PIT [208]

Answer:

Normal:

$ 3,509.7470

$    563.7093

$ 2,000.00

Due:    

 $3,930.9167

 $   597.5319

 $ 2,000.00

Explanation:

We solve using the formula for common annuity and annuity-due on each case:

C \times \frac{(1+r)^{time} }{rate} = FV\\

C \times \frac{(1+r)^{time} }{rate}(1+rate) = FV\\ (annuity-due)

<u>First:</u>

C 200.00

time 10

rate 0.12

200 \times \frac{11+0.12)^{10} }{0.12} = FV\\

200 \times \frac{11+0.12)^{10} }{0.12}(1+0.12) = FV\\

Normal:  $3,509.7470

Due:       $3,930.9167

<u>Second:</u>

100 \times \frac{(1+0.06)^{5} }{0.06} = FV\\

100 \times \frac{(1+0.06)^{5} }{0.06} (1+0.06)= FV\\

$563.7093

$597.5319

<u>Third:</u>

No interest so no time value of money the future value is the same as the sum of the receipts regardless of time or being paid at the beginning or ending.

1,000  + 1,000 = 2,000

4 0
3 years ago
In a given year, Jennifer earns $50,000 and spends $40,000. During the same period, Stcve earns $30,000 and spends $27,000. If J
elena55 [62]

Answer:

The sales tax is regressive with respect to income

Explanation:

sales tax by Jennifer = 0.1*30000

                                   = 3000

tax/income = 3000/50000

                   = 6%

sales tax by steve = 0.1*27000

                                   = 2700

tax/income = 2700/30000

                   = 9%

The tax increases with decrease in income, it indeed is regressive on the whole.

Therefore, The sales tax is regressive with respect to income

6 0
3 years ago
For​ 2018, Rest-Well Bedding uses​ machine-hours as the only overhead​ cost-allocation base. The direct cost rate is​ $6.00 per
maria [59]

Answer:

Predetermined manufacturing overhead rate= $6.875 per machine-hour

Explanation:

Giving the following information:

The estimated manufacturing overhead costs are​ $275,000 and an estimated​ 40,000 machine hours.

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 275,000/40,000

Predetermined manufacturing overhead rate= $6.875 per machine-hour

3 0
3 years ago
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