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rodikova [14]
2 years ago
5

PGP Co. expects to issue a $1,000 face-value bond that matures in 8 years. The annual coupon rate is 9% and interest payments ar

e expected to be paid annually. Similar bonds are currently priced at 101.4% of face value. Given this information, what is the required return by bond holders
Business
1 answer:
Harlamova29_29 [7]2 years ago
4 0

Answer:

Required return is 8.75%

Explanation:

Given,

FV (Face Value) is $1,000

PV (present Value) is computed as:

PV = FV × Price

= $1,000 × 101.4%

= $1,014

Nper (Number of years) is 8 years

PMT (Monthly payment) is computed as:

PMT = FV × Coupon rate

= $1,000 × 9%

= $90

r (Required return) is computed by using the excel formula:

=Rate(nper, pmt, pv, fv, type)

= Rate (8,90,-1014,1000,0)

= 8.75%

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Answer:

$57,400

Explanation:

The computation of the estimated total manufacturing overhead for the Customizing Department is shown below:

= Total fixed manufacturing overhead cost + Direct labor-hours × Variable manufacturing overhead per direct labor-hour

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All other information that is given in the question is ignored.

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What is the difference between patronizing your favorite store and patronizing your little brother?
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Patronizing a little brother means behaving condescendingly towards, a kind of master-slave relationship... One should never do that... 


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