1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
OverLord2011 [107]
3 years ago
6

AT&T 10-year, $1,000 par value bond is selling at $1,158.91. Interest on this bond is paid semiannually.

Business
1 answer:
Evgesh-ka [11]3 years ago
6 0

Answer:

Explanation:

Using YTM formula :

YTM = [PMT + {(FV-P) / n}] / [(FV+P)/2]

YTM = Yield to maturity = 14% = 0.14

PMT= Annual interest amount

FV = Face Value = $1000

P = Price =$1158.91

n = years to maturity = 10

 

0.14 = [PMT + {(1000 -1158.91) / 10}] / [(1000 +1158.91)/2]

0.14 = (PMT - 15.891) / 1079.455

PMT- 15.891 = 1079.455 * 0.14

PMT - 15.891 = 151.1237

PMT = 151.1237 -15.891

PMT = 135.23

So, Annual interest = $135.23

Annual interest rate = Annual interest / Face Value

= 135.23 / 1000

= 0.1352

=13.52%

Hence Annual Interest rate on the bond is 13.52%

You might be interested in
In evaluating the profit center manager, the income from operations should be compared a.across profit centers b.to historical p
olya-2409 [2.1K]

Answer: to historical performance or budget

Explanation:

A profit center in a business is a division that is able to make revenues independently and contribute to the revenue of the entire business. In evaluating the performance of a profit center manager, it is best to compare the performance to a budget or their historical performance.

This is because profit centers engage in different businesses and so their revenue making style will be unique. Some profit centers will make more than others because of the goods they produce or the way they produce it. It is therefore best to compare a profit center to an internal measure such as the budget and historical performance.

If the profit center exceeds either of these then they are performing well.

6 0
3 years ago
Clay is a marketing student learning how to evaluate value propositions for effectiveness. He looked through ten different propo
Pepsi [2]

Answer: they were generic, and they had no unique value communicated

Explanation:

Value proposition refers to the promise

that's made by an organization to its customers indicating why a product should be bought.

Since Clay looked through ten different propositions and found them to all be ineffective, the reason attributed to this will be due to the fact that the propositions were generic, and had no unique value communicated.

8 0
3 years ago
Western Energy makes quarterly deposits into an account reserved for purchasing new equipment two years from now. The interest p
Iteru [2.4K]

Answer:

a. 2 years

b. 1 year

c. 12 times

Explanation:

Interest period is the duration of the deposit. It is the length of time the money would remain in deposit. This is 2 years according to the question

Compounding period = number of times interest would be paid. In the question, this is a year. So interest would be paid every year

The compounding frequency - it is the number of times the deposit would be compounded. It is 12 months

The future value of the deposit can be determined using this formula :  

FV = P (1 + r/m)^nm

FV = Future value  

P = Present value  

R = interest rate  

N = number of years

m = number of compounding  

8 0
2 years ago
Marc agrees to sell Diana 500 copies of a book for $3.50 per book. Marc breaches the contract by not delivering the books. At th
Lesechka [4]

Answer:

$500

Explanation:

Damages refer to the financial loss suffered by a party to a breached contract. It occurs as a result of one party refusing to perform their obligation in the contract, causing injury and losses to the other.

Damages are the extra expense incurred by the offended party due to the breach of contract. The calculation of damages involves getting the difference between the market price and the contract price. For Diana, the damages will be the market price of $4.50, and the contact price $3.50. Because the books were 500, her damage would be 500 X 1 = $500.

6 0
3 years ago
Select the incorrect statement regarding relevant revenues-relevant revenues differ between the alternatives being considered-pa
blondinia [14]

Answer: The incorrect statement regarding relevant revenues is "past or future revenues may be relevant-"

Explanation:  

Relevant revenue is one that differ between the options that are relevant to a decision. If an income will be the same regardless of the option selected, the decision has no effect on the income.

<u>So The relevant revenue is future.</u>

A past income has already happened and will be the same regardless of the decision that is made, therefore it is not relevant when making a decision.

6 0
3 years ago
Other questions:
  • A broker-dealer owns 100 shares of abco stock, which it purchased at 28. if the stock is sold to a customer, the broker-dealer w
    5·1 answer
  • You are the manager of a firm that receives revenues of $40,000 per year from product X and $80,000 per year from product Y. The
    12·1 answer
  • The Burgers 4 Upper U Restaurant Group supplies its franchise restaurants with many​ pre-manufactured ingredients​ (such as bags
    11·1 answer
  • Last year Ann Arbor Corp had $250,000 of assets (which equals total invested capital), $305,000 of sales, $20,000 of net income,
    12·1 answer
  • As a finance major student of the UWI OC, you have just landed a lucrative job as a Financial
    14·1 answer
  • One role of an organization's headquarters is to provide needed resources to its business units and to coordinate activities acr
    8·1 answer
  • 15.क्रिया शब्दों के काल के भेद चुनिए- माँ ने मिठाई बनाई ।।
    11·2 answers
  • How should state appropriations to a state universoty choosing to report as engaged only in business-type activities be reported
    7·1 answer
  • if, after reflecting on the nature of leadership you decide that all leaders must treat their followers with respect, then you h
    8·1 answer
  • A recent college graduate with a major in economics attends a job fair but has not yet found a job. this graduate is counted as
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!