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vova2212 [387]
3 years ago
10

zero-coupon bond is a security that pays no interest, and is therefore bought at a substantial discount from its face value. If

stated interest rates are 11% annually (with continuous compounding) how much would you pay today for a zero-coupon bond with a face value of $2,600 that matures in 7 years

Business
1 answer:
trasher [3.6K]3 years ago
8 0

Answer:

$1,203.83

Explanation:

For computing the present value using the continuous compounding we need to apply the formula and the calculation part is also shown in the spreadsheet. Kindly find it below.

Given that

Face value = $2,600

Interest rate = 11%

Time period = 7 years

The formula is shown below:

= Face value ÷ EXP (Interest rate × Time period)

= $2,600 ÷ EXP (11% × 7)

= $1,203.83

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Sandoval Company operates in a country in which distributed profits are taxed at 25 percent and undistributed profits are taxed
Neko [114]

Answer:

The amounts that Sandoval should recognize as current tax expense in Years 1 and 2 are $29,000 and $34,000, respectively.

Explanation:

year 1:

$80,000*30% + $20,000*25%

= $29,000

year 2:

$120,000*30% - $40,000*(30%-25%)

= $34,000

Therefore, The amounts that Sandoval should recognize as current tax expense in Years 1 and 2 are $29,000 and $34,000, respectively.

4 0
3 years ago
Suppose a food pantry received a donation and allowed volunteers to vote on how the funds were to be spent. Three options were p
Tems11 [23]

Answer:

improvements to the building,

Explanation:

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The value of opportunity cost is equated to the value of the next best alternative. Where there were more than two alternatives available, the next best alternative from the chosen option becomes the opportunity cost. In this case, improvement to the building was voted the second preferred option; hence it becomes the opportunity cost.

8 0
3 years ago
The three economic questions that every society must answer are.
Mazyrski [523]
1 what will be produced?
2 how will it be produced?
3 how will the output society produces be distributed?
7 0
3 years ago
A stock has a beta of 1.48 and an expected return of 17.3 percent. A risk-free asset currently earns 4.6 percent. If a portfolio
pshichka [43]

Answer:

.66; .34

Explanation:

Calculation of weight of the stock and weight of the risk free asset

stock expected return = 17.3%

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risk free asset beta value is = 0

risk free asset return = 4.6

portfolio beta is = 0.98

let taken weight of the stock is X

so weight of the risk free asset is = 1-X

portfolio beta = stock weight*beta+riskfree weight*beta

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0.98= 1.48X+0

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66%

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3 0
3 years ago
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Sedbober [7]

Answer:

false

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8 0
3 years ago
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