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
Temka [501]
3 years ago
14

A company wishes to raise $27 million by issuing 15-year semi-annual coupon bonds with face value of $1,000 and coupon rate of 6

.60 percent. The bonds will have a yield to maturity of 7.70 percent. Determine the minimum number of these bonds the company needs to issue to raise the desired amount of money.
Business
1 answer:
Evgen [1.6K]3 years ago
3 0

Answer:

We first need to find out the present value of each $1,000 bond and then we can figure out how many of these bonds we require to raise $27 million

The n of payments is 15*2 because semi annual payments for 15 years so our N will be 30

The YTM is 7.70/2 because of semi annual payments = 3.85

The Face value is of 1,000 so FV= 1,000

The payments our 1000*0.066=66 divided by 2 because semi annual payments so PMT= 33

We will put these values in a financial calculator to compute the PV of a $1000 bond.

PV= 903

So now we know that the company can get $903 for each $1,000 bond as the bonds present value is 903.

Now in order to find out how many bonds need to be issued to raise 27 million we will divide 27 million by 903, as 903 is the amount we can raise by issuing a single bond.

27,000,000/903=29,900.3 so 29,901

The company will have to issue 29,901 bonds of face value $1,000 to raise $27 million

Explanation:

You might be interested in
The decisions you make at work typically have obvious answers.
Digiron [165]
This is true. A decision made at work typically has an obvious answer. 
3 0
3 years ago
Read 2 more answers
Expansionary monetary policy is usually has real expansionary short-run effects. as prices adjust, the long-run impact of?
denpristay [2]

Expansionary monetary policy is usually has real expansionary short-run effects. as prices adjust, the long-run impact of inflationary effect.

Expansionary or known as  loose policy is a form of macroeconomic policy that seeks to encourage economic growth. Expansionary policy might consist of either monetary policy or it can be  fiscal policy or it can be the combination of the two.

It is a part of the general policy prescription of Keynesian economics which is  to be used during economic slowdowns as well as the recessions in order to moderate the downside of economic cycles.

Expansionary policy can involve significant costs as well as the risks which includes macroeconomic or microeconomic, and political economy issues.

To know more about expansionary policy here:

brainly.com/question/20542747

#SPJ4

4 0
1 year ago
Quality risk refers to the chance that: a.The project relies on developing new or untested technologies. b.The well-being of the
GrogVix [38]

Answer:

The answer is c.The firm's reputation may suffer when the product becomes available.

Explanation:

Quality risk are potential losses due to failure to meet set quality standards.

7 0
3 years ago
Coronado Shoes Fool Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted wi
Burka [1]

Answer:

b. No journal entry is required

Explanation:

Given that

Estimated percentage of losing = 40%

Estimated amount = $800,000

By considering the above information, we concluded that

As in the case of the litigation, there is no journal entry is recorded as the possibility of the event is not certain with respect to the entity's economic resources.

Therefore in the given case, the correct option is b.

5 0
3 years ago
On June 19, Don Co., a U.S. company, sold and delivered merchandise on a 30-day account to Cologne GmbH, a German corporation, f
nirvana33 [79]

Answer: $197,600

Explanation: Don Co is making a sale to Cologne GmbH and on the date of the transaction there is an exchange rate called the spot rate. Don Co will record in its books the value of the transaction on the set date at the spot rate which is:

200,000 euros @ .988

= $197,600

on the date of the settlement of the debt by Cologne GmbH, the spot rate is also considered which will be 200,[email protected] .995 = $199,000

Note that on the payment date, the exchange rate has gone up and now Don Co has a higher receivable value that what is in its book.

the difference of $1,400 ($199,000-$197,600) will now be noted in the books of Don Co as an exchange gain on the transaction.

8 0
3 years ago
Other questions:
  • Ms. Benoit is a self-employed architect who earns $300,000 annual taxable income. For the past several years, her tax rate on th
    8·1 answer
  • You purchased 2,200 shares of the New Fund at a price of $25 per share at the beginning of the year. You paid a front-end load o
    12·1 answer
  • Three common methods employed in the clean-up of oil spills are
    7·1 answer
  • Corona Company is owned equally by Maria, her sister Carlita, her mother Gabriella, and her grandmother Olivia, each of whom hol
    8·1 answer
  • Honda's new electric unicycle is very unique. It is steered by the rider leaning, computer stabilized through control of its sin
    6·1 answer
  • By making minimum payments on a credit card, the consumer can A. Avoid paying late fees B. pay off the balance quicker C. lessen
    15·2 answers
  • On June 1, 2021, Wildhorse & Sons sold equipment to James Landscaping Service in exchange for a zero-interest bearing note w
    6·1 answer
  • After defining the problem that eCompeteUSA wants solved, you need to determine what type of research objective to pursue. What
    6·1 answer
  • On March 1, 2021, Brown-Ferring Corporation issued $100 million of 12% bonds, dated January 1, 2021, for $99 million (plus accru
    14·1 answer
  • Select the correct answer.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!