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laiz [17]
3 years ago
7

A 10-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $950. The bond curre

ntly sells at a yield to maturity of 7.5% (3.8% per half-year). a. What is the yield to call annually?
Business
1 answer:
nasty-shy [4]3 years ago
3 0

Answer:

6.76% annually

Explanation:

The rate of return bondholders receives on a callable bond until the call date is called Yield to call.

Yield to Call = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

It is assumed that face value of Bond is $1,000

C = Coupon Payment = $1,000 x 3.8% = $38

F = Face value = $1,000

P = Call price = $950

n -= number of periods to call = 5 x 2 = 10 periods

Yield to Call = [ $38 + ( $1,000 - $950 ) / 10 ] / [ ( $1,000 + $950 ) / 2 ]

Yield to Call = [ $38 - 5 ] / $975 = $33 / $975 = 0.0338 = 3.38% semiannually

YTC = 3.38% semiannually = 6.76% annually

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Answer:

The order in which the following budgets are generally prepared are as arranged below:

1. Sales budget

2. Production budget

3. Material purchases budget

4. Budgeted income statement

In an attempt to expatiate the decision above. We must observe that income statement starts with revenue. Similarly here, the budget will starts with sales. The revenue section is followed by production budget which from which various budgets like material, direct labor and overhead budget are prepared from. After the Production budget, follow the Material purchase budget, then Budgeted Income Statement

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3 years ago
bob katz and sally mander are a married couple with four children. total wages for 2018 equaled $102,400. stock which had been p
xxTIMURxx [149]

Answer:

Bob Katz and Sally Mander

Taxable Income for 2018:

= $78,200

Explanation:

a) Data and Calculations:

Total wages =                  $102,400

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Interest income =                      100

Total income =                 $107,700

less total deductions =     (29,500)

Taxable Income =            $78,200

b) Bob Katz and Sally Mander will have taxable income of $78,200 when the appropriate rate of tax is applied and the tax liability obtained, then the $1,500 tax credit will be deducted before arriving at the tax liability due.  

c) The short-term capital gain of $5,200 is taxed as ordinary income.  Since it is held for less than a year, it will be included in the taxable income for that year and it follows the same tax brackets as ordinary income.  On the other hand, the long-term capital gain of  $13,000 will attract a tax rate of 0 percent for a taxable income of $78,200.  Otherwise, it will attract a tax rate of 15 percent or 20 percent, depending on income level. This means that long-term capital gains tax rates are much lower than the ordinary income tax rate.

8 0
4 years ago
The role of management in the success of a business?
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Explanation:  *write "open" or "negotiable"

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Vsevolod [243]

Answer:

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