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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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Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities.
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500 000*12% = 60 000\12

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4 0
3 years ago
Look at the sales prices change that is being suggested. In particular, Winetki talks about one of the product's prices as doubl
PilotLPTM [1.2K]

The calculation of a revised break-even point in units for the firm as a whole, using the weighted-average contribution margin approach is 1,155,556 units.

<h3>What is the weighted-average contribution margin?</h3>

The weighted-average contribution margin shows the average amount that a group of products or services contribute to meet the fixed costs.

The weighted-average contribution margin can be computed as Aggregate sales - Aggregate variable expenses) ÷ Number of units sold.

<h3>Data and Calculations:</h3>

Aggregate sales revenue = $1,800,000

Aggregate variable costs = $1,125,000

Aggregate contribution margin = $675,000 ($1,800,000 - $1,125,000)

Total units sold = 1,500,000

Total fixed costs = $520,000

Weighted average contribution margin = $0.45 ($675,000/1,500,000)

Break-even point in units = 1,155,556 units ($520,000/$0.45)

Thus, the calculation of a revised break-even point in units for the firm as a whole, using the weighted-average contribution margin approach is 1,155,556 units.

Learn more about break-even analysis at brainly.com/question/21137380

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1 year ago
Q 2.29: Val-Tek has current assets of $1,700,000 and current liabilities of $900,000. If they pay $100,000 owed to a creditor, w
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3 years ago
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sukhopar [10]

Answer:

D hope that helps you out

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