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ehidna [41]
3 years ago
12

g Assume that a 15-year, $1,000 face value bond pays interest of $37.50 every 3 months. If you require a simple annual rate of r

eturn of 12 percent, with quarterly compounding, how much should you be willing to pay for this bond
Business
1 answer:
NemiM [27]3 years ago
3 0

Answer:

I will pay $1,207.56 for this bond.

Explanation:

Price of the bond is the present value of all cash flows of the bond. Price of the bond is calculated by following formula:

According to given data

Coupon payment = C = $37.5

Number of periods = n = 4 x 15 years = 60 periods

Current Yield = r = 12% / 4  = 3% semiannually

Price of the Bond = $37.5 x [ ( 1 - ( 1 + 3% )^-60 ) / 3% ] + [ $1,000 / ( 1 + 3% )^60 ]

Price of the Bond = $37.5 x [ ( 1 - ( 1.03 )^-60 ) / 0.03 ] + [ $1,000 / ( 1.03 )^60 ]

Price of the Bond = $1,037.83 + $169.73

Price of the Bond = $1,207.56

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timofeeve [1]

Answer:

$249,500

Explanation:

Calculation for the amount that Sheridan should report as its December 31 inventory

Using this formula

December 31 inventory=Goods costing+Goods purchased +Goods sold

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December 31 inventory=$249,500

Therefore the amount that Sheridan should report as its December 31 inventory will be $249,500

8 0
3 years ago
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ivanzaharov [21]

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dmitriy555 [2]

The supply chain strategy that would work best for Patio Creations is the push strategy. This is further explained below

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