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pishuonlain [190]
2 years ago
15

You bought one of Great White Shark Repellant Co.'s 8 percent coupon bonds one year ago for $810. These bonds make annual paymen

ts and mature 14 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 11 percent. If the inflation rate was 3.4 percent over the past year, what was your total real return on investment?
Business
1 answer:
Gennadij [26K]2 years ago
8 0

Answer:

real rate of return = 4.77%

Explanation:

you purchased the bond at $810 with 14 years to maturity

now, 1 year later the bond's price is:

  • PV of coupon payment = $1,000 / 1.11¹³ = $257.51
  • PV of coupon payments = $80 x 6.7499 (PV annuity factor, 11%, 13 periods) = $539.99

market value = $797.50

total nominal returns = $80 (coupon payment) + ($797.50 - $810) = $67.50

the real rate of return = {[1 + ($67.50/$810)] / (1 + 3.4%)} - 1 = 4.77%

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Explanation:

dont take it to the moon put it in your  closet for your childs to seal for lots of money

5 0
3 years ago
Read 2 more answers
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Rasek [7]

The responsibility for evaluating new technologies, new ideas, and new capabilities and identifying those that are most relevant to the organization is typically assigned to the <u>Chief technology officer​ (CTO)</u>

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5 0
2 years ago
Your first job is to settle the dispute between the owners. To settle the dispute, you need to ensure that both owners understan
Aneli [31]

Answer:

Inelastic: Demand for business goods tends to be me more inelastic than demand for consumer goods.

Explanation:

I already did this before. ur welcome

4 0
2 years ago
​Vipsana's Gyros House sells gyros. The cost of ingredients​ (pita, meat,​ spices, etc.) to make a gyro is​ $2.00. Vipsana pays
andrezito [222]

Answer:

The average fixed cost is $2.4.

Explanation:

Vipsana's Gyros House sells gyros.

The cost of ingredients​ to make a gyro is​ $2.00.  

Vipsana pays her employees​ $60 per day.  

She also incurs a fixed cost of​ $120 per day.

The cost incurred on ingredients and workers is a variable cost.  

The total fixed is thus $120.  

The average fixed cost for 50 gyros

= \frac{TFC}{Q}

= \frac{120}{50}

= $2.4

5 0
3 years ago
Five thousand bonds with a face value of $1000 each, are sold at 110. The entry to record the issuance is
Contact [7]

Answer:

Date, bonds sold at a premium

Dr Cash 5,500,000

    Cr Bonds payable 5,000,000

    Cr Premium on bonds payable 500,000

Explanation:

The total face value of the bonds is $1,000 x 5,000 bonds = $5,000,000

since the bonds were sold at 110, their price was $5,000,000 x 110% = $5,500,000

the difference between the face value and the actual market price = $5,500,000 - $5,000,000 = $500,000 must be recorded as premium on bonds payable (increases the bonds' carrying value)

4 0
3 years ago
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