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professor190 [17]
3 years ago
5

The WeKnowThisStuff Company issued a $1,000 par value, 6% coupon, 8 year bond. The interest is paid semiannually and the market

is currently requiring 5.5% on this risk level bond. What is the current value of the bond?

Business
1 answer:
Stella [2.4K]3 years ago
8 0

Answer:

$1,032.01

Explanation:

Given:

Face value of bond (FV) = $1,000

Coupon rate = 6% annual rate or 6% / 2 = 3% semi-annual rate

Coupon payment (pmt) = 0.03 × $1,000

                            = $30

Rate = 5.5% annually or 5.5 / 2 = 2.75%

Time period (nper) = 8 × 2 = 16 periods

Current value of bond is present value of bond which can be computed using spreadsheet function =PV(rate,nper,pmt,FV)

So, present value of bond is $1,032.01.

PV is negative as it's cash outflow.

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according to liquidity preference theory, a decrease in money demand for some reason other than a change in the price level caus
inna [77]

According to liquidity preference theory, a drop-off in money demand for some ground other than a change in the price degree causes The interest rate to go down, so the aggregate demand shifts.

<h3>What is aggregate demand?</h3>

The total amount of goods and services produced in an economy is the measurement of the aggregate demand.

The aggregate demand is shown as the total amount of money is exchanged at the particular price level and point in time.

Thus,  The interest rate to go down,

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8 0
2 years ago
Assuming that the physical output (i.e., the actual quantity of all final goods and services) of all final goods and services re
joja [24]

Answer:

a) true

Explanation:

A rise in the general price level is called inflation and it affects the nominal value of the company's output. E.g. you sell pants and last year they sold at $10 and now since inflation rate is 10%, they sell at $11. But inflation only affects nominal values, it doesn't affect real values which are calculated using a base price of a certain year X, times the quantity sold. Following the example, your real output would not be $11 per pair of pants, instead it would still remain at $10 since the inflation is discounted.

5 0
3 years ago
A company has budgeted fixed overhead of $1.00 per hour at expected capacity of 5,000 units which have a standard quantity of 2
Zepler [3.9K]

Answer:

$400 favorable

Explanation:

The computation of the volume variance is shown below:

Fixed overhead Volume Variance = Actual Overheads - Budgeted Overheads

where,

Actual overhead is

= 5,200 units × 2 hours × $1

= $10,400      

And, the budgeted overhead is

= 5,000 units × 2 hours × $1

= $10,000      

So, the volume variance is

= $10,400 - $10,000

= $400 favorable

We simply deduct the budgeted cost from the actual cost so that the difference could be come

5 0
3 years ago
Many not-for-profit organizations attempt to classify fund-raising expenses as a program services expenses by making the activit
Elena L [17]

Answer:

B. Purpose, audience, and content.

Explanation:Non profit Organisations are Organisations establishing to render services to different classes of persons at either subsidised rates or free these classes of people in a society.

Non profit Organisations are either funded by Government or other donor Organisations within or outside a country. The expenses incurred during the programs of Non profit Organisations to be classified as Program expenses it must have A PURPOSE, AUDIENCE AND CONTENT, this factors make it valid as a program expense.

8 0
3 years ago
Assuming a tax rate of 30%, the after-tax cost of a $100,000 dividend payment is a. $70,000 b. $100,000 c. $30,000 d. None of th
LuckyWell [14K]
The answer is c. $30,000

8 0
2 years ago
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