1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
saul85 [17]
3 years ago
6

A 10-year maturity, 6.5% coupon bond paying coupons semiannually is callable in five years at a call price of $1,010. The bond c

urrently sells at a yield to maturity of 6% (3% per half-year). a. What is the yield to call annually? (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. What is the yield to call annually if the call price is only $960? (Do not round intermediate calculations. Round your answer to 3 decimal places.) c. What is the yield to call annually if the call price is $1,010, but the bond can be called in two years instead of five years? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Business
2 answers:
Semmy [17]3 years ago
4 0

Answer:

Please find attached file for complete answer solution and explanation of same question.

Explanation:

Genrish500 [490]3 years ago
3 0

Answer:

1a.2.388% 1b.3.469% 1c.5.970%

Explanation:

YTM formula

=C+F-P/n ÷F+P/2 where;

F= face value

P= price

C= coupon

n= period

in this case

F=$1000 P=$1010 n=5 C =1000*6.5=65

Annually=65×2=130

substituting to formula

130+1000-1010/5 ÷1000+1010/2

=0.02388/2.388%

If 960

130+1000-960/5 ÷1000+960/2

=0.03469/3.469%

If collable in 2 years price 1010

130+1000-1010/2 ÷ 1000+1010/2

=0.05970/5.970%

You might be interested in
If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent, the expected real interest rate is _____
goldenfox [79]

The real interest rate is simply nominal interest rate less the inflation rate. In equation form this is equivalent to:

Real interest rate = Nominal rate – Inflation Rate

Real interest rate = 9% - 4%

Real interest rate = 5%

<span> </span>

7 0
2 years ago
During the year,Liptom Company made an entry to write off a $4,000 uncollectible account. Before this entry was made, the balanc
Andru [333]

Answer:

$55,500

Explanation:

The computation of the net realizable value after the write off entry is show below:

The credit balance in allowance with terms to bad debts is

= $4,500 - $4,000

= $500

Now the net realizable value is

= ($60,000 - $4,000) - ($4,500 - $4,000)

= $56,000 - $500

= $55,500

Hence, the same is to be considered

7 0
3 years ago
Hugo has been working on his company’s new marketing campaign for the past few weeks. He is now looking at the target market and
krek1111 [17]

Answer:The Sixth Step determining the promotional mix, which tool to use , when and how much.

Explanation:

Promotional mix is how resources are allocated of resources among elements such as advertising, sales promotion, public relations, personal selling or direct marketing.

Integrating the elements together depends on the product one is promoting, preferences of the customers, budget and general market conditions. The sixth step shows which tools and promotional mix to use to achieve the aim of the organization. Hugo is in the sixth step of the marketing planning process.

5 0
2 years ago
What is the opportunity cost of an investment?
mart [117]
Getting something but giving up something
8 0
3 years ago
A legal written promise to pay borrowed money back at a fixed rate of interest over a fixed period of time is a
andrey2020 [161]

The answer is Promissory Note

Explanation:

The most common document used to register a loan and guarantee this is paid back is a Promissory Note. In this, the parties involved register the amount of money that was borrowed and the borrower promises through the document to pay this amount of money before a fixed specific date. Also, promissory notes register the rate of interest that will be paid by the borrower. Besides this, a promissory note is a legal document that registers the loan and can be used as a legal instrument in case the money is not paid back.

8 0
3 years ago
Other questions:
  • Which limitation of an income statement occurs when one company uses an accelerated depreciation method while another company us
    6·1 answer
  • 14. Lassiter Industries has annual sales of $220,000 with 10,000 shares of stock outstanding. The firm has a profit margin of 7.
    6·1 answer
  • A law firm received $1600 cash for legal services to be rendered in the future. The full amount was credited to the liability ac
    13·1 answer
  • Jerry lives in New Mexico and makes $52,000 a year. If the median annual income in New Mexico is $53,731 and the median annual i
    8·2 answers
  • A group of elderly men, whose government disability benefits are the sole source of income, is approached to consider an experim
    5·1 answer
  • Homeowner's fees on condominiums do not include funds to pay:
    7·1 answer
  • Name the accounts debited and credited for each of the following transactions.
    9·1 answer
  • What would be the annual cost saved by shifting from the ​-bag lot size to the​ EOQ? The annual holding cost with the EOQ is ​$
    12·1 answer
  • What capability of supergroup would be considered costly to imitate?
    6·1 answer
  • A business established a website and now has customers order products online without visiting their store, they are responding t
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!