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
ioda
3 years ago
9

Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluatio

n. The firm has a bond issue outstanding with 15 years to maturity and a coupon rate of 8 percent, with interest being paid semiannually. The face value of the bond is $1,000. The required simple rate of return on this debt has now risen to 16 percent. What is the current value of this bond?
Business
1 answer:
Veronika [31]3 years ago
4 0

Answer:

The bonds now is being traded at $758.63

Explanation:

We have to discount the coupon payment and maturity at he market rate:

<em><u>Present value of the coupon payment</u></em>

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

Coupon payment $1,000 x 8%/2 = 40.00

time 15 years x 2 =  30

rate 0.08

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

PV $450.3113

<u><em>Present value of the maturity:</em></u>

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

Maturity  $1,000

time  30

rate  0.04

\frac{1000}{(1 + 0.04)^{30} } = PV  

PV   308.3187

PV c $450.3113

PV m  $308.3187

Total $758.6300

You might be interested in
Production-constrained decision. (You may select more than one answer. Single click the box with the question mark to produce a
skelet666 [1.2K]

Answer:

D. unanswered Sales revenue at split-off point.

Explanation:

Product contribution margin is the economic term used to describe a situation where a product sold generates revenue large enough to pay for all its production and distribution costs and expenses and still generate a profit for the company. In other words, this term refers to the money that is left over from the revenue generated from the sale of the product, after all of your production expenses have been paid. Sales revenue not being answered at the point of separation.

4 0
3 years ago
Read 2 more answers
If you must apply for a loan, you should?
Agata [3.3K]
First have good credit.
7 0
3 years ago
Answer this question on the basis of the given information for an economy in 2016. dollar value of resource extraction activity
Flura [38]
<span>Basis of the given information for an economy in 2016. Dollar value of resource extraction activity = $20 billion Dollar value of production activity = $50 billion Dollar value of distribution activity = $80 billion Dollar value of final output = $110 billion Gross output for this economy in 2016 equals $260 billion.</span>
6 0
3 years ago
what is nbetter fender gibson or danelectro guitars. (in your opinion). I ALREADY HAVE MINE DANELECTRO ALL THE WAY.
Nadusha1986 [10]

Answer:

Danelectro Guitars

Explanation:

They are just cool.

5 0
3 years ago
rite a research-based argumentative essay for or against the importance of standing up to an injustice such as bullying.
Mekhanik [1.2K]

Answer:

It is important to stand up to bullying for a number of reasons. You may think it's better to not get involved but staying neutral always helps the oppressor. You should not let someone suffer and watch as someone else puts them in physical or psychological pain every day, it is good to stand up for what is right. You may even make a life-long best friend. So stand up for what's right and don't stay neutral so the oppressor can continue to victimize someone.  

Explanation:

Hope this helps! :)

7 0
3 years ago
Other questions:
  • A property valued at $350,000 has an annual net operating income of $43,750. What is the capitalization rate?
    11·1 answer
  • Current Attempt in Progress The following information is available for Zoe’s Activewear Inc. for three recent fiscal years. 2022
    12·1 answer
  • One primary difference between services and the production of goods is that services are consumed _____ whereas goods can be ___
    9·1 answer
  • A company is 49% financed by risk-free debt. The interest rate is 8%, the expected market risk premium is 6%, and the beta of th
    15·1 answer
  • Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and a
    15·1 answer
  • 3. Which part of a letter identifies the address of the person writing the letter
    9·1 answer
  • Why has it become more difficult for teens to find part-time and summer work
    11·2 answers
  • Five business ideas that interest me are starting a pet sitting service, opening a place that help disabled pets, opening up a p
    10·1 answer
  • Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will:
    9·1 answer
  • Consider an economy at full employment. if consumers and firms become less optimistic about the future economy then:____.
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!