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wlad13 [49]
3 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]3 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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You are a research analyst in charge of publishing research reports for your company, C-Minus Investment Banking and Research. Y
VashaNatasha [74]

Answer:

<em>[C] Go on with the scheduled issue date as planned, issuing the objective report as is even though this may negatively affect business between the two companies.</em>

Explanation:

Although the communication between the two organizations might have a detrimental impact on business, it really is your duty to release the report as it is.

It is unethical to prolong the problem for convenience or as a favor to the executives of the other organization as the study shifts to downplay negativity.

8 0
4 years ago
Describe at least three exchange rate factors that are likely to attract foreign investors to a country's currency. Explain why
lana66690 [7]

Answer: 1. High Interest

2. Low Government Debt

3. Political Stability

Explanation:

Foreign Investors are Investors and investors always like to invest where there are prospects of growth and profit.

High Interest Rates give them the opportunity to invest their money in a currency that will give them a great return because a country where there are high interest rates imparts this on its currency which causes it to rise in value thereby giving currency holders a capital gain.

Another factor is Government Debt. A country with high Government debt will typically be unable to raise funds through the bond market easily. This shortage of funds can lead to inflation which devalues currency causing foreign currency investors to flee.

Finally there is the Political Factor (other factors exist). A stable country politically stands a better chance of maintaining a higher value currency that one with lower political stability. This is because political Stability attracts investors and as more investments come into a country, this reflects in its currency by making it stronger which will attract foreign currency investors.

6 0
4 years ago
Why an investor might choose to have less than 20% holding in a company if they could have more?
gtnhenbr [62]
<span>The simple answer here is you never want to over commit any part of your portfolio. Every single successful investor has a wide variety of investment holdings. This is known as diversification. If you place all of your "eggs in one basket," so to speak, if that investment were to play against you, your losses may be much higher than anticipated or often irrecoverable. With a diverse portfolio, when one small portion of your investment strategy fails, you can count on other, more successful aspect to make up the difference.</span>
3 0
3 years ago
Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $26,000. Budgeted cash receipts tota
aliya0001 [1]

Answer:

Calculations below

Explanation:

beginning cash balance $    26,000

Add; Cash receipts         $ 105,000

Total cash available         $ 131,000

Less: Cash disbursments $ (94,000)

Excess (Deficieny) of cash available over disbursments $    37,000

Borrowings ($70,000-$37,000) $    33,000

Ending cash balance $    70,000

5 0
3 years ago
Read 2 more answers
An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual
timurjin [86]

Answer:

D. bank reconciliation.

Explanation:

A bank reconciliation mainly computed by an accountant, gives the difference between the balance in relation to the bank statement and the cash balance with respect to the accounting records of the depositor in a particular financial institution.

In Financial accounting, a bank statement can be defined as an official summary or list of financial transactions, which typically comprises of the amount of money that has been paid into or withdrawn from an account by an individual or business entity over a specific period of time.

Generally, a bank statement usually has the following information charges, deposits, withdrawals, including the opening and closing balance for each account held at a given the period. Thus, bank customers are advised to frequently reconcile their records with bank statements in order to prevent not-sufficient funds (NSF) checks.

A not-sufficient funds (NSF) checks refers to a check that isn't honored by the bank of the issuer due to the fact that the individual or business entity has an insufficient fund. It is also known as a bounced or bad check.

In conclusion, a bank reconciliation is an internal report that is prepared in order to verify the accuracy of both the bank statement and the cash accounts of a business or individual.

7 0
3 years ago
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