Answer:
4. Bonds
Explanation:
Bonds are debt instruments used by corporates and governments to raise capital. Bonds are long-term sources of capital for a business and government and also an investment option to investors.
When the government or corporate issues bonds, they promise to pay the principal amount when the bond matures. Maturity ranges from 5 to 30 years. The bond issuer also commits to pay interest on regular intervals until the bonds mature. The interest to be paid is based on the coupon rate or interest rate as specified by the bond.
Answer:
5.23%
Explanation:
The formula and the computation of the dividend yield is shown below:
Dividend yield = (Annual dividend per share) ÷ (market price) × 100
where,
Market price = $48.70 per share
Annual dividend = $2.55 per share
So, the dividend yield = ($2.55 per share ÷ $48.70 per share) × 100
= 5.23%
It shows a relationship between the annual dividend by the market price so that the dividend yield can come
Answer:
Instructions are below.
Explanation:
Giving the following information:
Future value= $11,000,000
Number of years= 2
To calculate the initial investment required, we need an interest rate. <u>We weren't provided with this information, however, I will provide the formula and an interest rate.</u>
i= 8% compounded annually.
To calculate the lump-sum, we need to use the following formula.
PV= FV/(1+i)^n
PV= 11,000,000/(1.08^2)
PV= $9,430,727.02
Answer:
$106,595
Explanation:
Given:
Initial market rate = 9%
Dropped market interest rate, r = 7% per year
or
= 7% × [6 ÷ 12]
= 3.5% = 0.035
Remaining time, n = 9 years = 18 semi annual periods
Now,
Value of the bond at the retirement
= [ PVAF × Interest payment] + [ PVF × face value]
here,
Present value of annuity factor, PVAF = 
or
PVAF = 
or
PVAF = 13.189
And,
Interest payment = $100,000 × 8% × [6 ÷ 12 ] [since, 8% bonds]
= $4000
Present value factor = 
= 0.538
par value = $100,000
= [13.189 × $40] + [0.538 × 100,000]
= 52,758.7316 + 53,836.114
= $106,595
Hence,
The correct answer is option $106,595
