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
kherson [118]
3 years ago
9

Exodus Limousine Company has $1,000 par value bonds outstanding at 15 percent interest. The bonds will mature in 30 years. Compu

te the current price of the bonds if the percent yield to maturity is:
a. 4 percent

b. 8 percent

Calculate the final answer up to two decimal places. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume interest is paid annually.
Business
1 answer:
nasty-shy [4]3 years ago
7 0

Answer:

if YTM at 4% price :  $2,902.1237

if YTM at 8% price :  $1,788.0448

The bonds are above face value asthey offer a higher coupon payment than the market yield therefore the bond holders are willing to pay above theri face value

Explanation:

the market price of the bond will be the present value of coupo payment and maturity:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 150.000

time 30

rate 0.04

150 \times \frac{1-(1+0.04)^{-30} }{0.04} = PV\\

PV $2,593.8050

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   1,000.00

time   30.00

rate  0.04

\frac{1000}{(1 + 0.04)^{30} } = PV  

PV   308.32

PV c $2,593.8050

PV m  $308.3187

Total $2,902.1237

No we repeat the process with the yield at 8%

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 150.000

time 30

rate 0.08

150 \times \frac{1-(1+0.08)^{-30} }{0.08} = PV\\

PV $1,688.6675

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   1,000.00

time   30.00

rate  0.08

\frac{1000}{(1 + 0.08)^{30} } = PV  

PV   99.38

PV c $1,688.6675

PV m  $99.3773

Total $1,788.0448

You might be interested in
Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Helen agrees to buy "Garth’s ATV" for $750. Gar
Jobisdone [24]

Answer:

There is no contract since both Helen and Garth made a mutual mistake.

In contract law, a mutual mistake occurs when all the parties involved (Helen and Garth) are mistaken about important material facts that affect the contract (which ATV is being sold). The parties intend to perform but what they consider being part of the contract is not what the other party considers part of the contract. When both parties make a mutual mistake, the contract is cancelled.

Mutual mistakes are not on purpose, they are mistakes committed in good faith.

5 0
3 years ago
You are investigating a problem with the motherboard, what are the two main components to check out?
SVEN [57.7K]

The two main components to check with the motherboard that has a problem with it functioning and working is the memory and processor as they are the two components that makes the mother board function correctly and without these, the mother board won’t be working as it normally does.

3 0
4 years ago
Read 2 more answers
When her company's dry goods deliveries were late for the third time, Melissa withheld payment from her supplier until it was ba
insens350 [35]

Complete/Correct Question:

When the company's dry goods deliveries were late for the third time, Melissa withheld payment from her supplier until it was back on schedule. This is an example of ________ power.

a. reward

b. referent

c. legitimate

d. coercive

e. Expertise

Answer:

D, coercive

Explanation:

Coercive power is the ability of a manager to be able to make an employee/subordinate follow orders by the use of force.

In the above question, Melissa withholds payment after her order of dry goods came in late a third time.

Withholding payment forced the supplier to return to the scheduled arrangement of delivery.

Cheers.

4 0
3 years ago
Om is a college student at FSU. He has the option to buy a parking pass at the beginning of the year for $250. If Tom doesn't bu
Marat540 [252]

Answer:

risk seeking

Explanation:

8 0
3 years ago
Which two forms of financial aid require the student to bear the costs of college education??
Oxana [17]
The two forms of financial aid that is required for a student to bear the cost of college education are the following; direct loans and work study programs. It is because direct loans can help a student to provide money that they could lend and be paid off based on the time period it provides while work study program assist students in means of providing money for the student in which in return, they should work for them with no money to be paid for them.
5 0
3 years ago
Other questions:
  • In communicating the unique customer benefits of its various products to its target segments, thermos is defining its ________,
    14·1 answer
  • Horizontal analysis of comparative financial statements includes a. calculation of liquidity ratios. b. development of common-si
    9·1 answer
  • Commercial banks can borrow reserves directly from the fed at the
    5·1 answer
  • For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and end
    14·1 answer
  • On April ​3, a customer returned $ 900 of merchandise that had been purchased with cash to Cooke Supplies. Cooke​'s cost of the
    7·1 answer
  • Rico Musgrove is an 18-year-old worker in the receiving department of Trynix Inc. in St. Paul, Minnesota. On his first paycheck,
    14·1 answer
  • In the wake of the BP oil spill in the Gulf of Mexico, a slew of BP advertisements touted BP's commitment to protecting and pres
    7·1 answer
  • What is the current value of a future sum of money called?
    13·1 answer
  • Suppose you have a Xbox your roommate wants, and your roommate has a iPod that you want. You decide to trade the Xbox for the iP
    14·1 answer
  • Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships.
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!