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Virty [35]
3 years ago
6

Lincoln Park Co. has a bond outstanding with a coupon rate of 6.04 percent and semiannual payments. The yield to maturity is 6.1

percent and the bond matures in 15 years. What is the market price if the bond has a par value of $2,000
Business
1 answer:
Reil [10]3 years ago
3 0

Answer:

value of the bond = $2,033.33

Explanation:

We know,

Value of the bond, B_{0} = [I * \frac{1 - (1 + i)^{-n}}{i}] + \frac{FV}{(1 + i)^n}

Here,

Face value of par value, FV = $2,000

Coupon payment, I = Face value or Par value × coupon rate

Coupon payment, I = $2,000 × 6.04%

Coupon payment, I = $128

yield to maturity, i = 6.1% = 0.061

number of years, n = 15

Therefore, putting the value in the formula, we can get,

B_{0} = [128 * \frac{1 - (1 + 0.061)^{-7}}{0.061}] + [\frac{2,000}{(1 + 0.061)^7}]

or, B_{0} = [128 * \frac{1 - (1.061)^{-7}}{0.061}] + [\frac{2,000}{(1.061)^7}]

or, B_{0} = [128 * \frac{0.3393}{0.061}] + 1,321.3635

or, B_{0} = [128 * 5.5623] + 1,321.3635

or, B_{0} = $711.9738 + 1,321.3635

Therefore, value of the bond = $2,033.33

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If a family spends its entire budget in a given time frame, the family can afford either 10 restaurant meals or 30 home meals. A
Andrej [43]

The opportunity cost of one extra restaurant meal in the time frame is 3 home meals.

<h3>What is opportunity cost?</h3>

Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives. When the family chooses to go for the restaurant meal, they forgo the opportunity for a home meal.

Opportunity cost  = 30 / 10 = 3

To learn more about opportunity cost, please check: brainly.com/question/26315727

7 0
2 years ago
Why are american firms moving manufacturing jobs overseas?
strojnjashka [21]
Cheap labor force...American businesses can save a substantial amount if they outsource.
5 0
3 years ago
For the year ended December 31, Lopez Company implements an employee bonus program based on company net income, which the employ
Mrac [35]

Answer:

Lopezâs bonus expense is computed as $40,777. Therefore,

The Journal entries are as follows:

(i) On December 31,

Employee bonus expense A/c    Dr. $40,777

To Bonds payable A/c                                       $40,777

(To record the bonus due)

(ii) On January 19,

Bonds payable A/c     Dr. $40,777

To Cash A/c                                     $40,777

(To record the payment of the bonus to employees.)

4 0
3 years ago
a process with a one-sided specification has a Cpk of 0.22. What is the percentage of the production falls beyond the specificat
mihalych1998 [28]

Answer:

≈ 25%

Explanation:

Given data:

Cpk = 0.22

Determine The percentage of production that falls beyond the specification limit ( assuming normal distribution )

first calculate the value of Z ;

Cpk = Z /3

hence Z = Cpk * 3 = 0.22 * 3 = 0.66

The percentage of the production can be determined by

( 1 - value obtained from the standard normal table for the value of Z =0.66 )

1 - 0.7454 = 0.2546  ≈ 25%

8 0
2 years ago
On July 1, 2018, an interest payment date, $148000 of Bramble Corp. bonds were converted into 2930 shares of Bramble Corp. commo
Mademuasel [1]

Answer:

There will be a $9,250 increase in paid-in capital in excess of par

Explanation:

Given:

Face value of bonds =$148,000

Unamortized Discount = $6,900

Common stock shares in conversion = $45/value share

Therefore, computed increase to be paid-in capital in excess of par will be given as (Bramble's record):

Book Value of Bonds = (Face Value of Bonds, $148,000) - (Unamortized Discount, $6900) = $141,100;

(Book Value of Bonds, $141,100) - (Value Assigned to Common Stock, $131,850(2930 Common Stock Shares in Conversion x $45 par value per share)) =

=$9,250 increase to Paid-In Capital in Excess of Par.

Note: value assigned to common stock = 2939 * 45 =131850

4 0
3 years ago
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