Answer:
The bond should sell for a price of $59.74 today.
Explanation:
Zero Coupon Bond is a bond which does not offer any interest payment but it is issued at deep discount amount from the face value of the bond.
Price of Zero Coupon Bond = 
F = Face / Par Value of Bond = $1,000
r = rate of interest = 11%
n = number of years = 27 years
Price of Bond = 
Price of Bond = $59.74
As Zero coupon bond does not offer any discount so, it is valued much below the par value.
Answer:
The correct answer is letter "D": discount; higher than.
Explanation:
Yield To Maturity (YTM) is the expected return from holding a bond until maturity. It is when the bondholder does not end up selling the bond before the bond's maturity date. <em>YTM is calculated as an annual rate, and it accounts for what all future bond coupon payments at their present value are worth today.</em>
Ceteris paribus, <em>bonds are sold at discount only when the coupon rate is higher than the YTM.</em>
Answer:
the answer to a is 3 same as b
Answer:
$186,750
Explanation:
Urgent Messenger Service,INCOME STATEMENT for the year ended
Fees Earned 724,500
Less Expenses:
Salaries expenses 393,100
Rent expenses 75,000
Utilities expense 41,200
Depreciation expenses 10,650
Miscellaneous expenses 6,650
Supplies expense 6,150
Insurance expense 5,000
Net income (724,500-537,750 ) 186,750
Answer:
d. The potential exists for agency conflicts between stockholders and managers.
Explanation:
In a company the shareholders are the owners of the company who own shares and have stake in the company. They employ managers to take care of the daily running of the company.
There is the potential of conflict between the shareholders and the management of the company because shareholders just want to make short term profit, whole the management of the company may want to take initiatives that will lead to future gains.
Management will need to communicate effectively reason for temporary slump in profits, and emphasise future gains the company stands to get.
