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
Goshia [24]
3 years ago
9

Chamberlain Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6 percent co

upon bonds on the market that sell for $1,083, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?
Business
1 answer:
Nimfa-mama [501]3 years ago
8 0

Answer:

5.36%

Explanation:

We would need to calculate the yield to maturity of the current bonds:

YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]

  • coupon = $1,000 x 6% x 1/2 = $30
  • face value = $1,000
  • market value = $1,083
  • n = 20 x 2 = 40

YTM = {$30 + [($1,000 - $1,083)/40]} / [($1,000 + $1,083)/2] = $27.925 / $1,041.50 = 0.026812 x 2 = 0.05362 = 5.36%

Since the bond's coupon rate is higher than the market rate, the bonds are sold at a premium. In order to sell bonds at the par value, you must lower the coupon rate.

You might be interested in
5. Find an example of a video ad either on TV or on the Internet, and then answer the
mezya [45]

Answer:

nike brand add

Explanation:

the add Brings inspiration and innovation to every athlete in the world by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.

8 0
3 years ago
Phoenix, a popular coffee shop chain in North America, recently opened 400 stores to cater to its rapidly increasing number of p
Arisa [49]

Answer: market penetration

Explanation: In order to carter to its rapidly increasing number of patrons, Phoenix is engaging in market penetration by opening 400 stores to this effect. Market penetration is simply defined as a process of increasing or making more sales to current customers of an organisation without changing or modifying the products of the organisation.

4 0
3 years ago
A property contains 2.4 acres and is worth: A. $155,000 as single home site B. $85,000 per unit as a site for a duplex and C. $6
puteri [66]

Answer:

The best use is the duplex

Explanation:

The first possible use value, as a single home, is already given in the question: $155.000.

For the retail site, we have $60,000 per acre and 2.4 acres:

$60,000 x 2 + $60,000 x 0.4

=$144,000

A duplex has two units, and the value is $85,000 per unit:

$85,000 x 2 = $170,000

Therefore, the duplex gives the highest possible value of use to the 2.4 acres.

7 0
4 years ago
Most partnerships take in receipts amounting to _____.
Yuliya22 [10]
The answer is under $25,000
8 0
4 years ago
Read 2 more answers
Granny Gums has established a scholarship at the Martin College of Dentistry. She will make deposits into an endowment account t
OleMash [197]

Answer:

<u>Scholarship Amount would be $45.68</u>

Explanation:

Deposits into an endowment account that pays 12% per year

Year 0 Deposit $100

Year 1 Deposit $90

Year 2 Deposit $80

Year 3 Deposit $70

Year 4 Deposit $60

Year 5 Deposit $50

Year 6 Deposit $40  

First find the present worth of the gradient deposits.  

P = 100 + 90(P/A, 12%, 6) - 10(P/G, 12%, 6) = $380.69  

A = 380.69 (0.12)

A= $45.68

3 0
3 years ago
Other questions:
  • What term identifies stock that has been authorized and sold?​ ​authorized and paid stock ​outstanding stock ​treasury stock ​au
    9·2 answers
  • When a supplies internal service fund records a billing to the general fund, the journal entry in the internal service fund will
    7·1 answer
  • Which of the following activities of the design for six sigma (DFSS)focuses on developing specific requirements and design param
    14·1 answer
  • German expressionist films are characterized by _____________ settings, ____________ camera angles, and themes such as _________
    15·2 answers
  • Absorption costing income would be ____ variable costing income. a. $150,000 less than b. $150,000 greater than c. $240,000 less
    13·1 answer
  • Suppose a customer rents a vehicle for four months from Rent-A-Car on October 1, paying $4,400 ($1,100/month). Record Rent-A-Car
    11·1 answer
  • he following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Com
    11·1 answer
  • The net income reported on the income statement for the current year was $212000. Depreciation recorded on plant assets was $355
    11·1 answer
  • I made a kahoot game that I had to do for my class. Can someone join it and tell me if its good or not?
    5·2 answers
  • a rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!