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Mariulka [41]
3 years ago
15

Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $60,000 and matures in 20 years. T

he bond makes no payments for the first six years, then pays $2,700 every six months over the subsequent eight years, and finally pays $3,000 every six months over the last six years. Bond N also has a face value of $60,000 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 12 percent compounded semiannually. What is the current price of bond M and bond N? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Current price Bond M $ Bond N $
Business
1 answer:
AlexFokin [52]3 years ago
5 0

Answer:

Price of the Bonds is

M = 24,313.99

N =  5,833.33

Explanation:

check the file attached for full explanation i hope it helps

Download docx
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Explanation:

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3 years ago
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Answer:

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Explanation:

Since the lease is a sale type of lease,it means that as soon as the machinery is delivered to the lessee,profit should be recognized on the lease transaction,which is computed below:

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                          =$118149

However,every six months interest is charged on the lease,which clearly indicates another source of earnings,the interest in the first six months is given below:

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Conclusively, the increase in earnings is $118149+$18362.56

That is $136511.56

                                                                   

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