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faust18 [17]
3 years ago
9

A 3-year annual coupon bond has coupons of $12 per year starting one year from now and matures in 3 years for the amount $100. T

he yield to maturity is 11.8% (annual effective). Find the Macaulay duration of the bond.
Business
1 answer:
Ganezh [65]3 years ago
4 0

Answer: Macaulay Duration = 2.6908154485 = 2.69

Explanation:

Macaulay Duration = Sum of Cash flows Present Value/ current bond price

Cash flows: year 1 = $12

Cash flows: year 2 = 12

Cash flows: year 3 = 100 + 12 = 112

Sum of Cash Flow PV = (1×12÷ (1.118)^1) + (2×12÷ (1.118)^2) +(3×112÷(1.118)^3)

Sum of Cash Flow PV = 270.37857712

Current Bond Price or Value = Face Value/ (1+r)^n + PV of Annuity

Current Bond Price or Value = 1000/ (1.118)^3 + (30×(1 - (1+0.118)^-3)/0.118

Current Bond Price or Value  = 100.48202201

Macaulay Duration = 270.37857712 ÷ 100.48202201

Macaulay Duration = 2.6908154485 = 2.69

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Answer:

The dividend the company just paid is $3.53

Explanation:

The solution to the problem is given as follows.

$48.20 = D1/(.1120 − .0360)

$48.20= D1(0.076)

Making D1 the subject of formula we have.

D1 = $3.66

D0 = $3.66/(1 + .0360)

D0 = $3.53

6 0
3 years ago
Read 2 more answers
Which resource management activity identifies and verifies that personnel?
Sliva [168]

Resource management effectively develops and uses the resources of the organization. Credentialing recognizes and confirms the personnel.

<h3>What is credentialing?</h3>

Credentialing is a process that involves the documentation of the individual of the organization or the corporation so that the true and fair authentication and qualification of the person associated are ensured.

It is an essential function of the management that confirms the skills and requirements of the person that will be an asset to the organization. The qualifications of the person required will be established and can be approved.

Therefore, credentialing is used to determine and affirm.

Learn more about credentialing here:

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8 0
2 years ago
What sort of questions would a Turing test ask and what are some responses to each
Butoxors [25]
<h2>The following are some turing questions and the responses to them: </h2><h2> </h2>
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Response: I found this on the web for your query.

  • The following sentence is true. The previous sentence is false. Is the previous sentence true

Response: I am confused. Would you please repeat?

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7 0
3 years ago
Lone Star has computed the following unit costs for the year just ended:
Vladimir79 [104]

Answer:

$84

Explanation:

The computation of each unit of the company's inventory under absorption costing is shown below:

= Direct material used  + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead  

= $12 + $18 + $25 + $29

= $84

We simply added the first four-unit cost through which total unit cost would come

All other information which is given is not relevant. Hence, ignored it

3 0
3 years ago
Depreciation is the decrease or loss in value of an item due to age, wear, or market conditions. We usually consider depreciatio
mart [117]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

One company buys a new bulldozer for $136500. The company depreciates the bulldozer linearly over its useful life of 22 years. Its salvage value at the end of 22 years is $14400.

First, we need to find de depreciable value:

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A)

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V= 122,100 - X*5550

X= number of years

B) n=17

Value= 122100 - 17*5550= $27,750

6 0
3 years ago
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