Hi, could someone pls help me?

Sykora Corp. sells $450,000 of bonds to private investors. The bonds are due in 5 years, have a 6% coupon rate and interest is p

Nikitich [7]

Answer:

(B) 9%

Explanation:

In order to calculate this you just have to do a simple rule of three with the 100% being the 450,000 you withdraw from the paid money the selling price of the bonds:

490,222-450000= 40,222

Now we do the rule of three using 450,000 as 100%:

$\frac{450,000}{100}=\frac{40,222}{x} \\x=\frac{40,222*100}{450,000}\\ x=8,93 %\\$

So the actual rate would be 8,93 which is closest to 9% so that would be the answer.

5 0

3 years ago

There are three key approaches to entering international markets. each company must decide how to enter each chosen marketlong d

Minchanka [31]

The three key approaches that are needed in entering international markets include the following; direct investment, exporting and even joint venturing. These are three key approaches that will complete the space provided above as this is where the company decide on how a chosen market long dash may enter.

3 0

3 years ago

Using the above information, which kind of investor would likely turn the greatest profit in this market, given that each of the

ArbitrLikvidat [17]

Answer:

The correct answer is (A)

Explanation:

People are more successful in housing business who invests for a longer period. Housing prices do not fluctuate rapidly which is why a long term investor who holds the house for a longer period will likely to earn greater profit compared to those who will hold the house for a short-term period. The short-term investor will earn profit but a small percentage whereas long-term investors will earn a greater profit which depends on how long they can hold on to the house.

8 0

4 years ago

Harold bought land from Jewel for $150,000. Harold paid $50,000 cash and gave Jewel an 8% note for $100,000. The note was to be

Flauer [41]

Answer: b. Harold is not required to recognize gross income but must reduce his cost basis in the land to $130,000.

Explanation:

When Harold bought the land for $150,000 he acquired a basis of $150,000 in the land. Due to Jewel's cash problems, he managed to pay $20,000 less for the land.

For tax reporting purposes, he need not recognize gross income but he must reflect that he acquired the land for $20,000 less in his basis for the land thereby reducing the basis to $130,000.

8 0

4 years ago

Bond A pays $8,000 in 20 years. Bond B pays $8,000 in 10 years. (To keep things simple, assume these are zero-coupon bonds, whic

Nikolay [14]

Answer:

To find the value of bond, let's use the formula:

Value of bond = price of bond / (1 + interest rate)ⁿ

Here n represents number of years.

At 7% interest rate:

Value of bond A = $\frac{8000}{(1+0.07)^2^0} = 2067.35$

Value of bond B = $\frac{8000}{(1+0.07)^1^0} = 4066.79$

At 14% interest rate:

Value of bond A = $= \frac{8000}{(1+0.14)^20} = 582.09$

Value of bond B = $= \frac{8000}{(1+0.14)^10} = 2157.95$

The difference between bond A at 7% and 14%:

$582.09 - $2067.35 = -$1485.26

The difference between bond B at 7% and 14%:

$2157.95 - $4066.79 = -$1908.84

% decrease between bond A and B:

$\frac{1908.84 - 1485.26}{1908.84} * 100 = 22.19$

Therefore, from the above calculations, we have the following:

Suppose the interest rate is 7%, Using the rule of 70, the value of Bond A is approximately $2067.35, and the value of Bond B is approximately $4066.79 .

Now suppose the interest rate increases to 14 percent.

Using the rule of 70, the value of Bond A is now approximately $528.09 , and the value of Bond B is approximately $2157.95 .

Comparing each bond's value at 7 percent versus 14 percent, Bond A's value decreases by a 22.19 percentage than Bond B's value.

The value of a bond decreases when the interest rate increases, and bonds with a longer time to maturity are more sensitive to changes in the interest rate.

4 0

3 years ago