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xenn [34]
3 years ago
12

TravelEasy Inc. has issued 30-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 14% and the

current yield to maturity is 8%, what is the firm's current price per bond?
Business
1 answer:
rosijanka [135]3 years ago
5 0

Answer:

Coupon (R) = 14% x $1,000 = $140

Bond yield (kd) = 8% = 0.08

No of years (n) = 30 years

No of compounding periods (m) = 2

Po= R/m(1-(1+Kd/m)-nm/Kd/m + FV/(1+Kd/m)nm

Po = $140/2<u>(1-(1+0.08/2)</u>-30x2 + 1,000(1+0.08/2)30x2

                         0.08/2

Po = $70<u>(1-(1+0.04)</u>-60 + 1,000/(1 + 0.04)60

                       0.04

Po = $70<u>(1-(1.04)</u>-60 + 1,000/(1.04)60

                 0.04

Po = 70(22.6235) + 95.06

Po = $1,678.71

Explanation:

The price of a bond is equal to the present value of coupon plus the present value of the face value.

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In the soda industry, production costs per unit continue to fall as the firm expands. in this type of industry, smaller rivals t
iragen [17]
<span>in this type of industry, smaller rivals trying to enter the industry </span>will have much higher average costs. 
As a result, it is almost impossible for a new business to come and compete with the large players that already conquered the market for a long period of time because the end cost of their products that arrive for the customers will be significanty higher than their competitors
8 0
3 years ago
A country finds itself in the following situation: the government budget surplus is 2% of its GDP; private savings is 30% of GDP
DaniilM [7]

Answer:

The current account deficit will increase from 1% to 31% of GDP.

Explanation:

National saving and investment identity helps in understanding the determinants of trade and current account balance. The current account is in balance when the quantity demanded of financial capital is equal to the quantity supplied of financial capital.  

Here, the government saving or surplus and private savings are the supply of financial capital and investment indicates demand for financial capital.

The current account balance is

= Supply of capital - Demand for capital

= (30 + 2)% - 33%

= 32% - 33%

= -1%

So the current account is in deficit by 1% of GDP.  

If the private savings becomes zero, the current account balance will be

= Supply of capital - Demand for capital

= 2% - 33%

= -31%

The current account will be in deficit by 31%.

8 0
3 years ago
Indicate whether each of the following cash activities would be reported on the statement of cash flows as (a) an operating acti
Tasya [4]

Answer:

Given list of cash activities is divided among operating activities, financing activities and investing activities in the explanation section.

Explanation:

  1. Paid for Advertising                Operating Activity  
  2. Paid for Office Equipment         Investing Activity
  3. Issued Capital Stock                 Financing Activity
  4. Paid officers salaries                 Operating Activity
  5. Sold services                                 Operating Activity
  6. Paid rent :                                       Operating Activity
  7. Paid dividends:                       Financing Activity
  8. Issued a note payable:                 Financing Activity
  9. Paid rent:                                  Operating Activity
  10. Sold excess office equipment: Investing Activity

Operating Activities include cash generated from operations, Interest Paid and Tax Paid.

Investing Activities include payment to acquire or proceeds from sale of property, plant and equipment, proceeds from government grants, interest and dividend received.

Financing Activities include proceeds from issue of shares, proceeds from long term borrowings, dividends paid etc.

4 0
3 years ago
At a farmer’s market, a basket of strawberries costs $20 and a basket of peaches costs $18. On Saturday, 23 baskets were sold
nlexa [21]

Based on the calculation done, there are 15 baskets of peaches.

x + y = 23 ..... i

20x + 18y = 430 ...... ii

From equation i, x = 23 - y ..... iii

Put equation iii into ii

20x + 18y = 430

20(23 - y) + 18y = 430

460 - 20y + 18y = 430

2y = 30

y = 30/2 = 15

x + y = 23.

x + 15 = 23

x = 23 - 15 = 8

Learn more about equations on:

brainly.com/question/13763238

4 0
2 years ago
Administrative assistants are categorized in what occupational group?
oksano4ka [1.4K]

Answer:

43-0000 Office and Administrative Support Occupations (Major Group)

Explanation:

3 0
3 years ago
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