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
klasskru [66]
3 years ago
14

A bond has a par value of $1,000, a current yield of 7.17 percent, and semiannual coupon payments. The bond is quoted at 104.68.

What is the amount of each coupon payment?
Business
1 answer:
RSB [31]3 years ago
7 0

Answer:

Each payment = $37.52778

Explanation:

Given:

Bond value = $1,000

Current yield = 7.17% = 0.0717

Bond quoted = 104.68%

Payment method = Semi-annual = 2 payment

Computation of annual coupon amount:

Current yield = Annual coupon / (Bond value × Bond quoted)

0.0717 = Annual coupon / ($1,000 × 104.68%)

0.0717 = Annual coupon / ($1,046.8)

Annual coupon = 0.0717 × $1,046.8

Annual coupon = $75.05556

Computation of each payment:

Each payment = Annual coupon amount / 2 payment

Each payment = $75.05556 / 2

Each payment = $37.52778

You might be interested in
From the perspective of the parent corporation, contrast the tax consequences of a subsidiary liquidation under the general nonr
erik [133]

Answer:

Section 338 allows the corporation to purchase stock and retain the basis of assets. It also allows adjusting the basis for the assets. Under section 338 the, if the corporation sold its assets, the transactions related to sale will be subjected to double tax. Whereas, if the corporation cause liquidation for the target asset's and then undergo for a sale is subjected to single tax.  

6 0
3 years ago
Tropical Fruit Extracts expects its earnings before interest and taxes to be $218,000 a year forever. Currently, the firm has no
katen-ka-za [31]

Answer:

The unlevered value of the firm is $869325.15

Explanation:

For computing the value of unlevered firm, the following formula should be used which is shown below:

Value of levered firm = Earning before interest and taxes × (1 - tax rate) ÷ cost of equity

where,

Earnings before income and taxes are $218,000

Cost of equity is 16.3%

And, the tax rate is 35%

Now put these values on the above formula

So, the value would be equals to

= $218,000 × (1 - 0.35) ÷ 16.3%

= $141,700 ÷ 16.3%

= $869325.15

The other terms like bonds and the annual coupon should not be considered in the computation part because we have to calculate for unlevered firm which only includes equity and the bond is a debt security. Thus, it is irrelevant.

Hence,  the unlevered value of the firm is $869325.15

3 0
3 years ago
Which of the following is a capital resource? a. A computer programmer. b. A corporate bond issued by a computer manufacturer. c
Furkat [3]

Answer:

The answer is B. corporate bond issued by a computer manufacturer

Explanation:

Capital in business is the money committed to the business by its owner or owners. Capital can also be from a borrowed fund e.g loan

Bond is a long term loan issued to finance a capital project.

Therefore, the corporate bond issued by a computer manufacturer is a capital.

Option A which is a computer programmer is a human asset.

Option C is an inventory (Current assets). This is used to make computer chips.

Option D is an asset

6 0
3 years ago
Your company has a cost of capital equal to 10%. If the following projects are mutually exclusive, and you only have the informa
Elena-2011 [213]

Answer:

The project to accept is:

e. E

Explanation:

a) Data and Calculations:

Cost of capital = 10%

Mutually Exclusive Projects:

                            A       B        C        E

Payback (years)   1        5        2        5

IRR                    18%   20%    20%    12%

NPV (Millions) $40    $75    $35   $100

b) Project E should be preferred over all the other projects.  It has the highest net present value (NPV) and its internal rate of return (IRR) is above the company's cost of capital.  It surpasses projects A, B, and C in financial performance terms using time-value of money analysis.

8 0
3 years ago
On November 15, 2018, X Corp., an accrual basis taxpayer, enters into a contract which will provide the corporation with the use
Lady bird [3.3K]

Answer: $20000

Explanation:

Since $100,000 is paid for the contract which will provide the use of manufacturing equipment for 5 years, the payment that can be deducted for each of the 5 years will be an equal payment.

Therefore, the payment that X Corp. can deduct in 2018 will be:

= $100,000 / 5

= $20000

6 0
3 years ago
Other questions:
  • Sunland Company has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2022. No dividen
    8·1 answer
  • Joan is spending time in China and wants to start an Internet business there. The Chinese government tells her that certain item
    12·1 answer
  • A development planning system primarily focuses on developing knowledge sharing networks to help trainers and managers reach emp
    15·1 answer
  • Kertis, Inc. reported Net fixed assets as follows on its Balance sheets for December 31, 2011 and December 31, 2012: 2011 2012 N
    9·1 answer
  • Which term describes the act of working from a home, remote, or mobile location while connecting into the employer's private net
    10·1 answer
  • Recently, Job P951 was completed with the following characteristics: Number of units in the job 100 Total direct labor-hours 100
    6·1 answer
  • Suppose you put half of your money in Monster Beverage and half in IBM. What would the beta of this combination be if Monster Be
    9·1 answer
  • Suppose the market for hamburgers is unregulated. That is, hamburger prices are free to adjust based on the forces of supply and
    11·1 answer
  • 15. Consider a no-load mutual fund with $400 million in assets, 50 million in debt, and 15 million shares at the start of the ye
    9·1 answer
  • the number of families receiving assistance under TANF had dropped by ______ within five years of its enactment
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!