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Vedmedyk [2.9K]
4 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:
eduard4 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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A borrower made a mortgage loan 7 years ago for $160,000 at 10.25% interest for 30 years. The loan balance is now $151,806.62 an
Alja [10]

Answer:

9.39%

Explanation:

Base on the scenario been described in the question, the effective cost of refinancing is 9.39%

7 0
3 years ago
Journalizing and posting an adjusting entry for office supplies
belka [17]

Answer:

Office Supplies T-account

<u>Debit :</u>

Beginning Balance                  $600

Purchases                              $2,300

Totals                                     $2,900

<u>Credit:</u>

Ending Balance                        $500

Used (<em>Balancing Figure</em>)       $2,400

Totals                                     $2,900

Adjusting Entry

Supplies Expenses $2,400 (debit)

Office Supplies $2,400 (credit)

Posting Entries.

1. Supplies Expense = $2,400 (Debit Balance)

2.Office Supplies = $500 (Debit Balance)

Explanation:

As the supplies are used during the period, recognize an expense : Supplies Expense and de-recognize the Office Supplies Asset account to the extend of the amount of inventory used during the period.

In other words we are taking out an expense (Increasing it) and decreasing an asset : Office Supplies.

5 0
3 years ago
Bernard is a trainee accountant. His manager asked him to record a loss on the sale of machinery in the business’s temporary acc
Agata [3.3K]

Answer:

Gain and loss accounts

Explanation:

Gain and loss accounts are a form of temporary accounts that are utilized to gather combined sales and purchases that has an effect on the profit or loss of business activities over a given period, which is typically in a year. For example, the loss on property sold account.

Hence, in this situation, the correct answer to the question is known to be a GAIN and LOSS ACCOUNT.

6 0
3 years ago
One of the central tenets of the ____________ is that companies will be able to sell more goods, more easily, if they produce on
GrogVix [38]

Answer:

The correct word for the blank space is: Target market.

Explanation:

The target market is the sector of the market that companies look forward to offering their goods or services. After segmentation analysis, firms determine their specific niche so they can specialize in manufacturing a product that will better match consumers' needs, thus, it is more likely they will purchase the product. Target marketing is based on the central Marketing Theory.

3 0
3 years ago
Which theoretical framework identifies the ideal leadership style as incorporating a high concern for both production and people
nevsk [136]

Answer:

(c)

Explanation:

The leadership grid also called managerial grid is a model propounded by Robert R. Blake and Jane Mouton in 1964.

The model is called leadership grid because it is represented in the form of a grid, with "concern for production" in the x-axis while "concern for people" as the y-axis.

This model identifies the ideal leadership style as one that incorporates a high concern for production while also considering the individuals who take part in the production; the people.

5 0
3 years ago
Read 2 more answers
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