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wel
3 years ago
8

Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest ra

te of 10 percent and the interest is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. There are 10 years to maturity.
Required:

Compute the price of the bonds based on semiannual analysis.
Business
1 answer:
Mrrafil [7]3 years ago
3 0

Answer:

The answer is $788.12

Explanation:

Price of the bond is what the issuer will pay for the bond

The payment is semiannual.

Number of years (N) - 20 periods (10 years x 2)

Yield-to-maturity(YTM) - 7%( 14% ÷ 2)

Present Value(price of bond) = ?

Future Value(FV) = $1,000

Payment Coupon(PMT) = $50[(10% x $1000) ÷ 2]

Using a Financial calculator, price of the bond on semiannual basis is

$788.12

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Barney takes his wife Betty to a Porsche dealership and tells her to pick out whichever car she wants as a birthday present. She
amid [387]

Answer:

The car should be given to Betty because Barney already have a contract with the dealer and he has stated explicitly in the terms to the contract that the car belongs to his wife. Porsche dealer should be prosecuted for breach of contract in the court of law.

Explanation:

8 0
3 years ago
You lend a friend ​$​, which your friend will repay in equal annual​ end-of-year payments of ​$​, with the first payment to be r
Vadim26 [7]

Answer: 18%

Explanation:

The payments that your friend will make are an annuity as they are constant. This means that the loan amount of $15,000 is the present value of the annuity.

To find the rate of return, use the factor tables.

Present value of annuity = Annuity * Present value interest factor of annuity, 14 years, ?%

15,000 = 3,000 * Present value interest factor of annuity, 14 years, ?%

Present value interest factor of annuity, 14 years, ?% = 15,000 / 3,000

Present value interest factor of annuity, 14 years, ?% = 5.0

Go to the present value of annuity factor table and find out what interest rate intersects with 14 periods such that the factor is 5.0.

That rate is 18%.

Rate of return is therefore 18%.

6 0
2 years ago
At January 1, Year 1, under its restricted stock unit (RSU) plan, Label Corporation grants RSUs representing 10,000 of its $1 pa
slamgirl [31]

Answer:

The number of shares that will be added to the denominator of diluted EPS for Year 1 is 6,000 shares

Explanation:

For computing the added shares, first we have to compute per year expenses, than repurchased shares, afterwards, final amount will be come

Per year expenses = (Number of shares × price per share) ÷ (Vesting period)

= (10,000 shares × $10) ÷ (5 years)

= $20,000

The remaining expenses  after one year would be equal to

= Total expenses - annual expenses

= $100,000 - $20,000

= $80,000

Now the repurchased shares would be

= (Remaining expenses) ÷ (average market price)

= ($80,000) ÷ ($20)

= 4,000 shares

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= 6,000 shares

4 0
2 years ago
The following data pertain to an investment proposal (Ignore income taxes.):
Hoochie [10]

The net present value of the proposed investment is closest to $5,146.

Net present value = Present value of cash-flows - Initial investment

<u>Given Information</u>

PV of cashflows at 18%

Cash flows                            PV at 18%     P.V. of cash-flows

$12,000 (Cost saving)            3.127                 $37,524

$6,000 (Salvage)                   0.437                 <u>$2,622</u>

Total                                                                   <u>$40,146</u>

Net present value = $40,146 - $35,000

Net present value = $5,146

Therefore, the net present value of the proposed investment is closest to $5,146.

Learn more about Net present value

<em>brainly.com/question/25748668</em>

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2 years ago
As dvds become popular substitutes for video cassettes, demand for video cassettes is likely to
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