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
ludmilkaskok [199]
3 years ago
6

Oil Wells offers 5.65 percent coupon bonds with semiannual payments and a yield to maturity of 6.94 percent. The bonds mature in

seven years. What is the market price per bond if the face value is $1,000? Select one:
a. $936.48
b. $913.48
c. $902.60
d. $929.42
e. $949.70
Business
2 answers:
ololo11 [35]3 years ago
8 0

The market price per bond if the face value is $1,000 is $975.93

<h3>Explanation: </h3>

Oil Wells offers 5.65 percent coupon bonds with semiannual payments and a yield to maturity of 6.94 percent. The bonds mature in seven years. What is the market price per bond if the face value is $1,000?

A coupon bond  is a debt obligation with coupons attached that represent semiannual interest payments. Semiannual is the payment that is paid twice each year, typically once every six months.

Bond valuation includes the present value of the bond's future interest payments, known as cash flow, and the bond's value upon maturity known as its face value or par value. The face value also referred to as the par value, stated value, maturity value, principal amount, and legal amount.

Yield to maturity (the discount rate which sum of all future cash flows from the bond) is 6.94 percent

Coupon bond payments = \frac{5.65 percent}{2} *1000 = 28.25dollar

Market price per bond = Coupon bond payments * [\frac{(1-\frac{1}{[1+\frac{0.0694}{2 } ] * 7*2}  )}{\frac{0.0694}{2}  } ] + \frac{1000}{[1+\frac{0.0694}{2}]*7*2 }

Market price per bond  = 28.25 * 10.942 + 620.3

Market price per bond = 975.93

Therefore the market price per bond if the face value is $1,000 is $975.93

Learn more about the market price per bond brainly.com/question/13676962

#LearnWithBrainly

FinnZ [79.3K]3 years ago
7 0

Answer:

option (d) $929.42

Explanation:

Data provided in the question:

Coupon bonds payments = 5.65% semiannual

Yield to maturity, r = 6.94% = 0.0694

Face value = $1000

Now,

Coupon bond payments = \frac{5.65\%}{2} × $1,000

= $28.25

market price per bond = Payment × \frac{(1-\frac{1}{(1+\frac{r}{2})^{2n}})}{\frac{r}{2}} + \frac{\textup{face value}}{(1+\frac{r}{2})^{2n}}

Here,

n is the maturity period and 2n is due to the semiannual payments

Thus,

market price per bond = $28.25 × \frac{(1-\frac{1}{(1+\frac{0.0694}{2})^{2\times7}})}{\frac{0.0694}{2}} + \frac{\textup{1,000}}{(1+\frac{0.0694}{2})^{2\times7}}

= $28.25 × 10.942 + 620.3

= $929.42

Hence,

The answer is option (d) $929.42

You might be interested in
Sweetmeats Inc., a deli, produces its own grains, such as corn, wheat, rice, and oats. The employees create different types of b
Minchanka [31]

Answer:

Cost advantage.

Explanation:

In this scenario, Sweetmeats Inc., a deli, produces its own grains, such as corn, wheat, rice, and oats. The employees create different types of breads without having to buy the grains from other sources. This has helped them sell their bread items to customers at much lower prices than other neighboring delis. This scenario best illustrates a cost advantage.

Cost advantage can be defined as the factors, benefits or edge which an organization has to produce its goods and services at a cheaper rate and better quality, over its competitors or rivals in the same industry. Some of these factors include availability of raw materials, branding, skillful workforce, intellectual property, quality distribution channels, favorable location, great customer services, superior technology, etc.

6 0
3 years ago
If any of you are having problems we can talk go ahead let everything out i'll help you!
Harlamova29_29 [7]

Answer:

thank you !

Explanation:

i might need to use thins soon haha

thanks,

~mina

8 0
3 years ago
Cosmo has just made his dream come true of buying the property that his restaurant occupies. His excitement is short lived, howe
forsale [732]

Answer:

Realistic aspect

Explanation:

Considering the scenario described in the question it can be concluded that Cosmo shifted his focus onto which REALISTIC aspect of goal-setting theory.

This is because following Cosmo making his dream come true of buying the property that his restaurant occupies, the idea that he could rent out the storefront next to the restaurant for added income is a REALISTIC Aspect of Goal Getting.

This implies that Cosmo is more realistic in terms of his financial abilities and willingness to work toward the goal of paying off the mortgage loan

7 0
3 years ago
On September 1 the Petite-Sizes Store paid $12,000 to the Mega-Mall Co. for 3-month rent beginning September 1. Prepaid Rent was
blsea [12.9K]
B) Rent Expense $4,000
Rent $4,000
6 0
3 years ago
Beginning inventory $ 34,000 Inventory purchases (on account) 164,000 Freight charges on purchases (paid in cash) 19,000 Invento
sukhopar [10]

Answer:

<u>Journal entries - Perpetual inventory system</u>

<em>Inventory purchases (on account) 164,000</em>

Inventory $ 164000(debit)

Trade Payables $ 164000 (credit)

<em>Freight charges on purchases (paid in cash) 19,000</em>

Freight Charges $ 19000 (debit)

Bank $19000 (credit)

*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

Inventory $19000 (debit)

Freight Charges $ 19000 (credit)

<em>Inventory returned to suppliers (for credit) 21,000</em>

Trade Payable $ 21000 (debit)

Inventory $21000(credit)

<em>Sales (on account) 259,000</em>,

Trade Receivables $ 259000 (debit)

Revenue $259000(credit)

<em>Cost of inventory sold 157,000</em>

Cost of Sales $157000 (debit)

Inventory $157000 (credit)

<u>Journal entries - Periodic inventory system</u>

<em>Inventory purchases (on account) 164,000</em>

Inventory $ 164000(debit)

Trade Payables $ 164000 (credit)

<em>Freight charges on purchases (paid in cash) 19,000</em>

Freight Charges $ 19000 (debit)

Bank $19000 (credit)

*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

Inventory $19000 (debit)

Freight Charges $ 19000 (credit)

<em>Inventory returned to suppliers (for credit) 21,000</em>

Trade Payable $ 21000 (debit)

Inventory $21000(credit)

<em>Sales (on account) 259,000</em>,

Trade Receivables $ 259000 (debit)

Revenue $259000(credit)

<em>Cost of inventory sold 157,000</em>

Cost of Sales $157000 (debit)

Inventory $157000 (credit)

Explanation:

<em>Inventory purchases (on account) 164,000</em>

Recognise an Asset - Inventory and a liability - Account payable

<em>Freight charges on purchases (paid in cash) 19,000</em>

Recognise an expense - Freight Charges and de-recognise asset - Bank

*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

Derecognise expense- Freight and recognise an asset - Inventory

<em>Inventory returned to suppliers (for credit) 21,000</em>

De-recognise Asset - Inventory and De-recognise Liability - Account Payable

<em>Sales (on account) 259,000</em>,

Recognise Asset - Trade Receivable and Recognise Revenue

<em>Cost of inventory sold 157,000</em>

Recognise expense - Cost of Sale in Profit and Loss and De-recognise Asset- Inventory

6 0
3 years ago
Other questions:
  • Wesimann Co. issued 13-year bonds a year ago at a coupon rate of 8.5 percent. The bonds make semiannual payments and have a par
    9·2 answers
  • For a perfectly competitive firm, the marginal cost curve is identical to the firm’s ________________
    11·1 answer
  • Ezra is comparing two checking accounts. One has a monthly fee of $8 and a per-check fee of $0.20, and the other has a monthly f
    11·2 answers
  • Describe the relationship between an individual consumer's demand and market demand
    7·1 answer
  • Entries and Balance Sheet for Partnership On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. Lang agrees to invest
    14·1 answer
  • McDonnell-Myer Corporation reported net income of $741 million. The company had 544 million common shares outstanding at January
    10·1 answer
  • Bill operates a proprietorship using the cash method of accounting, and this year he received the following: $140 in cash from a
    6·1 answer
  • Which of the following is an internet job search "do"​
    11·2 answers
  • What is SEO?
    15·1 answer
  • Christina buys groceries every month from Target and rarely does much research on the products she buys. What is the marketing t
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!