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wlad13 [49]
2 years ago
14

Keenan Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 p

ar value. The bond has a 6.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,045. What is the bond's nominal yield to call
Business
1 answer:
tester [92]2 years ago
8 0

Answer:

4.40

Explanation:

For the nature of the Yield to Call and Yield to maturity

You can eiher solve with excel, a financial calculation or with approximation method

This will be the formula for approximation method

YTM = \frac{PTM + \frac{C-F}{n }}{\frac{PTM+F}{2}}

PTM= 41.25 (1,000 x 8.25 = 82.5 annual interest divide by 2 as there are semiannual payment)

C= 1045 This is the value of the called bond

F= 1000 The face value of the bond

n= 12 (6 years 2 payment per year)

We plug this into the formula and solve

YTM = \frac{C + \frac{C-P}{n }}{\frac{C+P}{2}}

partiel result of the upper part: 45

partial result, divisor: 1022.5

quotient 4.4009780%

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Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following fina
7nadin3 [17]

Answer:

Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2020. Owner Santana Rey contributed $31,000 to the business in exchange for additional stock in the first quarter of 2020 and has received $4,100 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)

Explanation:

3 0
2 years ago
Which of the following considerations is related to sociocultural
raketka [301]

This consideration is related to the socio cultural environment:

a.) A new business decides to begin with the city its owners live in

since they are familiar with the local geography and tax issues.

Explanation:

The socio cultural environment one is familiar with influences them in many ways.

This also includes their choice of place for where they will start the business simply because they know that domain much more and it will be easier to be effective in there.

This is the reason that people are often told to be in their familiar turf.

The new business will be able to use its full contacts and have an insight on what works and what doesn't because they operate from their own area.

8 0
3 years ago
Read 2 more answers
Firms operating in industries where economies of scale are common will likely see ________ levels of labor productivity from the
kiruha [24]

Answer:

The correct word for the blank space is: higher.

Explanation:

Economies of Scale is a key concept for any business in any industry. It is also important for consumers trying to understand why smaller businesses may have to charge more for similar products made by larger companies. Overall, economies of scale mean <em>that production becomes more efficient as the number of goods being produced increases</em>.

6 0
3 years ago
Brian invests $11,500, at 6% interest, compounded semiannually for 2 years. Manually calculate the compound amount (in $) for hi
Katena32 [7]

Answer:

The important thing to remember here is that the interest is compounded semi annually, which means twice a year. When the 1st interest is compounded, the second interest is calculated on that new amount.

(11,500 + (11,500×6%)) = $ 12,190

(12,190 + (12190×6%)) = $ 12921.40

Explanation:

4 0
2 years ago
Tom, Mary and Jill have apartments in the same building. A security system for their building costs $750. Tom is willing to pay
SSSSS [86.1K]

Answer: The efficient outcome is to have the security system installed. After the meeting the security system will <em><u>be installed</u></em>, which illustrates the <em><u>free rider problem.</u></em>

Free rider is the burden on resource which is been shared, the problem is created by its usage or over-exploitation by individual who aren't paying their fair share.

∴ Here Tom is a free rider. i.e. He is willing to pay $100 where he should've paid $250.

3 0
3 years ago
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