A master budget ________. A. is only prepared for manufacturers as they are the only type of company with material purchases an
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Answer:
Total $1,091.0030
Explanation:
The market value of the bond will be the sum of the present value of the cuopon payment and the maturity date:
present alue of cuopon payment will be calculate as present value of an ordinary annuity:
C 42.25 (1,000 face value x 8.45% /2 payment per year)
time 21 (10 years at 2 payment per year+ 1 payment)
rate 0.036 (here we use the YTM rate /2 because there are 2 payment per year)
PV $615.1803
<u>Then, for the present value at maturity, we calculate the present value of a lump sum</u>
Maturity 1,000.00
time 21.00
rate 0.036
PV 475.82
<u>Finally, we add them both together</u>
PV c $615.1803
PV m $475.8227
Total $1,091.0030