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Pie
3 years ago
15

A firm's bonds have a maturity of 10 years with a $1,000 face value, a 9 percent semiannual coupon, are callable in 5 years at $

1,050, and currently sell at a price of $1,080. What is their yield to maturity
Business
1 answer:
Sladkaya [172]3 years ago
4 0

Answer:

Yield to maturity is 3.94%

Explanation:

Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.

Face value = F = $1,000

Coupon payment = $1,000 x 9% = $90/2  = $45 semiannually

Selling price = P = $1080

Number of payment = n = 10 years x 2 = 20

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

Yield to maturity = [ $45 + ( 1000 - 1080 ) / 20 ] / [ (1,000 + 1080 ) / 2 ]

Yield to maturity = [ $45 - 4 ] / 1040 = $41 /1040 = 0.394 = 3.94%

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Select all that apply GAAP and IFRS rules ______. require that the same method be used for both internal and external segment re
Alexxandr [17]

Answer:

The correct options are "A, C, and D".

Explanation:

  • GAAP becomes regarded as a relatively 'rules-based' management framework, seems to be the accounting technique used throughout the United States
  • IFRS becomes quite 'principles-based', although this would be the accounting framework used in more than 110 countries throughout the globe.
  • These allow the same approach being used for international and domestic section reporting, which generate reconciliation issues.

4 0
3 years ago
RTP Corp. is developing a new computer processor to compete against Intel's successful product
Alenkinab [10]

Answer: Target Costing

Explanation:

Target Costing is a method of costing on a product done while it's still being produced to determine the best price at which the product can be sold that would be able to compete with price of other similar products in the market and still make profit for the company.

RTP Corp needs to apply target costing for it's new computer processor in order for it to be profitable and beat the price of other processors in the market.

6 0
3 years ago
During March, Hanks Manufacturing started and completed 30,000 units. In beginning work in process, there were 5,000 units 60 pe
Delvig [45]

Answer:

Equivalent units

Materials= 40,000 units

Conversion= 36,000 units

Explanation:

Equivalent units are notional whole units which represent incomplete work and are used to apportion cost between work progress and completed work

Equivalent units = Degree of work done(%) × units of inventory

Conversion cost

<em>Item</em>                                            <em>     equivalent units</em>

Opening inventory 40% × 5,000 =     2,000

Fully worked units 100% × 30,000= 30,000  

Closing inventory 40%× 10,000=      <u> 4,000 </u>

Total equivalent unit                       <u>    36,000</u>

Notes

The following notes explains the computation of the items of equivalent unit for conversion cost:

1. DOC for opening inventory is 40% i.e 100%-60%. Remember that 60% work has been done in the previous period, so the balance is to be done in this current period  

2. Fully work represent the units of inventory introduced in the current period and completed in the same period. Meaning 100% work was achieved in the period.  

3. Closing work is only 40% completed. This represent work started this period but not yet completed.

Material  cost

<em>Item   </em>                                               <em> equivalent units</em>

Opening inventory 0% × 5,000 =         0

Fully worked units 100% × 30,000= 30,000  

Closing inventory 100%× 10,000=   <u> 10,000 </u>

Total equivalent unit                         <u> 40,000</u>

Notes

The following notes explains the computation of the items of equivalent unit for Material cost:

1. DOC for opening inventory is 0% i.e 100%-1000%. Remember that materials are added at the beginning. Hence all the materials required for the opening inventory had been added in the previous period

2. Fully work represent the units of inventory introduced in the current period and completed in the same period. Meaning 100% materials  was added in the period.  

3. All the materials required for the closing inventory were added in this period, hence, 100% degree of completion was used

Equivalent units

Materials= 40,000 units

Conversion= 36,000 units

5 0
3 years ago
U.S. based Majestic Co. sells products to U.S. consumers and purchases all of materials from U.S. suppliers. Its main competitor
lakkis [162]

Answer:

Economic exposure.

Explanation:

Economic exposure is also known as operating exporter is known as a phenomenon where a business's cash flow is affected by currency rate fluctuations. It occurs over the long term and affects product value.

Businesses protect themselves from economic exposure by operational strategies mostly through diversification, and currency risk mitigation strategies.

In this instance Majestic Co a United States company has a competitor in Belgium and so tend to be affected by foreign exchange fluctuations of the dollar to Belgium currency.

3 0
3 years ago
Read 2 more answers
You are a self-employed profit-maximizing consultant specializing in monoplies. Five single-price, profit-maximizing monopolies
inna [77]

Answer:

<u>Firm A  </u>

Firm A is charging a cost of $3.90 for every unit. The normal expense is the all out cost separated by amount which ends up being $3.70 per unit. Presently its minor income is $3.00 per unit and negligible expense is $2.90 per unit. The imposing business model firm can't create enough yield in light of the fact that the minor income surpasses the minimal expense.  

Consequently, Firm A is encouraged to expand its yield. This will bring increasingly net income and get it a higher benefit. The yield should increment till minimal income and negligible expense gets equivalent.  

<u>Firm B  </u>

Firm B is charging a cost of $5.90 for every unit. The normal expense is $4.74 per unit. Presently its peripheral expense is $5.90 per unit. Note that the syndication firm is charging a value which is equivalent to the negligible expense. Consequently, it is carrying on seriously. by delivering more and charging less.  

Consequently, Firm An is encouraged to diminish its yield. This will expand cost more than the expansion in cost with the goal that it acquires a higher benefit. The yield should diminish till minimal income and minor expense gets equivalent.  

<u>Firm C  </u>

Firm C is charging a cost of $11.00 for every unit. The normal expense is the all out expense is $11.90 per unit. Minimal income is $9.00 per unit and minor expense is $9.00 per unit. The imposing business model firm is delivering a benefit expanding yield on the grounds that the minor income rises to the peripheral expense. Nonetheless, it is bearing misfortunes since normal expense is higher than cost.  

Thus, Firm C is encouraged to stay at the present degree of yield. It can close down over the long haul if misfortunes keep on happening. This is on the grounds that it can't increment or diminishing its yield as it will just alumni the misfortunes.  

<u>Firm D  </u>

Firm D is charging a cost of $35.90 for every unit. The normal expense is additionally 35.90 per unit. The minor income is $37.90 per unit and negligible expense is $37.90 per unit. The imposing business model firm is creating a benefit amplifying yield on the grounds that the minor income approaches the peripheral expense. Strangely, its cost is not as much as its negligible income which is beyond the realm of imagination.  

Thus, Firm D has fouled up estimations with respect to its cost. Thoughtfully, the cost ought to consistently be higher than the minimal income or at most extreme it tends to be equivalent to minor income. It ought to return and recalculate the cost.  

<u>Firm E  </u>

The information identified with the minor income and minimal expense for Firm E isn't given. The cost charged is $35.00 per unit. The normal expense is at its base level and is equivalent to $33.00 per unit. This data isn't adequate to distinguish if the firm is working at a benefit boosting level.  

Therefore, Firm E is encouraged to stay at the present degree of yield.

6 0
3 years ago
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