1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
vovangra [49]
3 years ago
14

What is the yield to maturity of a bond if the bond is sold at $985.48 today, pays annual coupon of 7% and matures in 12 years?

Round to the nearest hundredth percent. Do not include a percent sign in your answer. (i.e. If your answer is 4.32%, then type 4.32 without a % sign)
Business
1 answer:
AveGali [126]3 years ago
7 0

Answer:

Explanation:

  • The Yield to Maturity [YTM] of a Bond is calculated by using the following formula = Yield to Maturity [YTM] = Coupon Amount + [ (Face Value – Bond Price) / Maturity Years] / [(Face Value + Bond Price)/2]

  • Where, Coupon amount = $1000  x 7% x ½ = $35

  • Face Value = $1,000

  • Bond Price = $985.48

  • Maturity Years = 12 years x 2 = 24 Periods

  • Yield to Maturity [YTM] = Coupon Amount + [ (Face Value – Bond Price) / Maturity Years] / [(Face Value + Bond Price)/2]

  • = $35 + [ ($1,000 – $985.48) / 24 Years)] / [($1,000 + $985.48) / 2]

  • = [($35 – 0.605) / 992.74] x 100 = 3.46%

The Yield-to-Maturity (YTM) of this Bond = 3.46%

You might be interested in
The principal-agent problem arises in labor markets because: Group of answer choices compensating wage differences do not pay fo
densk [106]

Answer:

workers may provide less-than-expected work effort.

Explanation:

Principal-agent problem

This is also called Agency problem. It is simply defined as a type of problem of motivating one party that is the agent just to act on behalf of another person which is the principal. This problems arise usually when incentives between the agent and the principal are not perfectly aligned or in tune.

This form of problem is also said to occur when agents example a firm's managers tends to run after their own personal goals rather than the goals of the principals who is the firm's owners.

Agency relationship

This form of relationship is said to occur if there is a set up or an arrangement in where one person's welfare is dependent or based on what another person does.

Agent

This is simply known as an Individual whose services has being employed by a principal so as to help achieve the principal's objective.

Principle

This is also known as a person who simply employs the services of one or more agents so as to obtain or achieve an objective.

6 0
2 years ago
What are 3 categories of soft skills?
dimaraw [331]
Personal, social and methodical skills
5 0
2 years ago
Read 2 more answers
The Doright Door Company is considering outsourcing production of its door to Mexico. Use the weighted scoring method to evaluat
Gekata [30.6K]

Answer:

(A) Mexican supplier cost = $445,800 or $89.16 average cost.

In-house cost = $714,000 or $142.8

(B) Mexican supplier total weighted score = 0.265 or 22.43%

In-house supplier weighted score= 0.238 or 23.8%

(C) Yes, explaination below

Explanation:

Mexican Supplier cost breakdown:

Quota price $83 X 5000 = $415, 000

Transport cost

1. to transport 5000 doors would require making a total of 20 trips from Mexico to USA (5000/250 doors)

2. at a cost of $825 per trip, total cost to transport doors is = $16,500.

Sending Engineers costs and Negotiation cost =

$5000 + $1000

(Transport+Sending Engineers cost) =

$22,500

Inventory carrying cost= 20% of cost of storing the goods. (total of all other cost) 20% x 22500 = $8300

Total cost = $445,800 or $89.16 average cost.

Total weighted score average:

Using the formula;

Weight= score x rating

Score = Weight/rating (making score subject of the formula)

Mexican Weighted

score1= 16%/3 = 0.0533, + 0.12 score2, + 0.035 + score3, + 0.056 + score4. = 0.265.

American weighted score

Using same formula;

0.04 score1, + 0.15 score2, + 0.014 score3, + 0.034 score 4 = 0.238.

The company should outsource the product. Why? because it will reduce total cost of doors, making them cheaper for if they do so, resulting in higher profit.

6 0
3 years ago
A corporation had the following assets and liabilities at the beginning and end of this year. Assets Liabilities Beginning of th
xenn [34]

Answer:

Hence, the net income earned or net loss incurred by the business during the year $102,340.

Explanation:

3 0
3 years ago
George is offered an investment opportunity by his friend Ray. He asks George for $6,900 and offers to repay him $12,990 after a
SVETLANKA909090 [29]

Answer:

Depositing in bank is a better option.

Explanation:

For this solution, we can either determine the interest rate given to George by his one of the friend or the future worth method,

Future worth method is used here,

Given that,

PV = $6,900

R = 9%

N = 10 Years

FV = PV\times(1+R)^{N}

FV = 6,900\times(1+0.09)^{10}

FV = 6,900\times(1.09)^{10}

FV = 6,900 × 2.3673

FV = $16,334.81

Since, the future worth of investing in bank is more than the money to be offered by the George's friend (16,334.81 > 12,900) and hence, depositing in bank is a better option.

8 0
2 years ago
Other questions:
  • What is meant by centralised direction?
    7·1 answer
  • Suppose the government decides to create a price support (floor) on the price of corn, which of the following is a true statemen
    13·1 answer
  • When businesses raise the price of a needed product or service after a natural disaster, this is known as .
    10·2 answers
  • In three to four sentences, explain how an increase in government spending can increase the national debt.
    9·2 answers
  • ) Market size and growth rates in different countries can be influenced positively or negatively by A. E) the absence or presenc
    9·1 answer
  • One reason why a blanket obligation for all employees to obey their employers no matter what is unreasonable is that the choice
    9·1 answer
  • Which statement or statements apply to a bond which is selling at a premium?
    6·2 answers
  • Alpaca Corporation had revenues of $245,000 in its first year of operations. The company has not collected on $18,800 of its sal
    13·1 answer
  • PLZZZZ HELPP FASST
    15·1 answer
  • Some employees at a clothing manufacturer investigate pay rates on Salary and learn that the company has been paying them signif
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!