Answer:
10.46%
Explanation:
Data provided in the question
NPER = 4 years
Price of the bond is $956.12
Yield to maturity is 11.43%
Coupon rate = 10%
We assume the face value be $1,000
So the coupon payment is
= Face value × Coupon rate
= $1,000 × 10%
= $100
Now the current yield on this bond is
= Coupon payment ÷ Price of the bond
= $100 ÷ $956.12
= 10.46%
D sounds like the best answer
Answer:
The required rate of return is 11%
Explanation:
Dividend valuation method calculated the value of stock based on dividend payment, growth rate and required rate of return.
Use following formula to calculate the the required rate of return
Price = Dividend / ( Required Rate of return - Growth rate )
20 = $1 / ( Required Rate of return - 6% )
20 = $1 / ( Required Rate of return - 0.06 )
Required Rate of return - 0.06 = $1 / $20
Required Rate of return - 0.06 = 0.05
Required Rate of return = 0.05 + 0.06
Required Rate of return = 0.11
Required Rate of return = 11%
Answer and Explanation:
The journal entry to record issuance of the stock in exchange for the land and building is given below:
Land $237,000
Building $368,000
To Common stock, $8 par value $168,000
To Paid-in capital in excess of par value, common stock $437,000
(Being the issuance of the stock in exchange for the land and building is recorded)
