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Nostrana [21]
3 years ago
6

The current price of a 10 year $1000 par value bond is $1158.91. Interest on this bond is paid every 6 months, and the nominal a

nnual yield is 14%, Given these facts, what is the annual coupon rate on this bond
Business
1 answer:
tatuchka [14]3 years ago
4 0

Answer:

16.22%

Explanation:

To calculate the annual coupon rate, you can use the following formula:

Coupon Rate= (Annual coupon payment/Par value of the bond)* 100%

Annual coupon payment= $1158.91*14%= 162.2

Par value of the bond= $1000

Coupon Rate= (162.2/1000)*100%

Coupon Rate=0.1622*100%

Coupon Rate= 16.22%

The annual coupon rate on this bond is 16.22%

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Kinslow Manufacturing Company paid a dividend yesterday of $2.50 per share. The dividend is expected to grow at a constant rate
Ahat [919]

Answer:

15.50%

Explanation:

The computation of the cost of retained earning is shown below:

As we know that

Price = Dividend × (1 + growth rate) ÷ (required rate of return - growth rate)

$25 = $2.50 × (1 + 0.05) ÷ (required rate of return - 5%)

$25 = $2.625  ÷ (required rate of return - 5%)

After solving the required rate of return is 15.50%

We simply applied the above formula to find out the cost of retained earning

3 0
3 years ago
Dong Wang wants to retire when he has saved $1,500,000. He can make 30 payments of $15,000 each, with each payment made at the b
agasfer [191]

Answer: 6.94%

Explanation:

You can use an Excel worksheet to solve for this:

Number of periods = 30

Payment = 15,000 (should be a negative number)

Present value = 0

Future value = 1,500,000

Type = 1 (this shows that it is an annuity due because payments are at the beginning of the year).

Rate = 6.94%

7 0
3 years ago
Gary and Wilma Johnson plan to open a bus tour business taking people from their small City to historic sites along the east coa
Dovator [93]

The answer to the given question above would be Profit Margin. On the given scenario above, since they will be offering different kinds of services at once, what they should pay attention to is the profit margin or the net margin. Profit margin serves as the measurement of profitability. This is expressed in percentage and shows how much the return sales are that are generated by the company based on the amount they have initially invested.

4 0
3 years ago
Read 2 more answers
Categories of expenditures Van and Amy Cho live in Swarthmore, PA. Amy's father, Carlos, lives in Sweden. For each of the follow
Inessa05 [86]

Answer:

A. It is included as part of government purchases (G)

B. it is included as part of consumption

C. It is included as part of investment

D. Amys father's transaction is not included as part of GDP

Explanation:

Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.

GDP calculated using the expenditure approach = Consumption spending by households on durable and non durable good and services + Investment spending by businesses + Government Spending + Net Export

The project in A is being undertaken by The Federal Aviation Administration. So, it qualities as government spending.

Amy gets a new video camera made in the United States is an instance of consumer spending

Van's employer upgrades all of its computer systems using U.S.-made parts is undertaken by a business so it is included in GDP as part of investment spending.

The transaction by Amy's father takes place outside the US, thus, it is not included in the calculation of US 's GDP.

I hope my answer helps you

8 0
3 years ago
1. Question 1 Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent t
Blizzard [7]

Answer:

B. What must be given up to acquire it

Explanation:

The opportunity cost is the cost which is to be sacrificed to gain for some better option

Since in the given case the aunt is thinking to open a hardware store but it will cost her $500,000 for rent and the to purchase the stock

And, also she also have to quit her accountant job for $50,000

So in this option quitting the job is to be considered as an opportunity cost

7 0
3 years ago
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