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Black_prince [1.1K]
3 years ago
14

Oil Well Supply offers a 7 percent coupon bond with semiannual payments and a yield to maturity of 7.73 percent. The bonds matur

e in 9 years. What is the market price per bond if the face value is $1,000?
Business
1 answer:
svp [43]3 years ago
8 0

Answer: <u>The market price per bond is $930,28.</u>

Explanation: First we must calculate the amount of each coupon.

1000 x 7% = 1000 x 0.07 = $ 70 each coupon.

The payments are semiannual and the bond expires in 9 years therefore we have a n = 9 x 2 = 18.

The yield to maturity is 7.73%

And the face value is 1000 $

P0 = ∑\frac{Cup_{t} }{(1+YTM)^{t} } + \frac{Face value}{(1+YTM)^{n} }

Where t is equal to each of the periods of time.

So:

∑\frac{70}{{1+0,0773}^{t}} +\frac{1000}{{1+0,0773}^{18}} = <u>930,28</u>

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Steve Colburn's portable sawmill used 100% for business, was completely destroyed by fire. The sawmill had an adjusted basis of
pashok25 [27]

Answer: $35,000

Explanation:

A casualty loss is simply a loss that an individual or business incurs when a property is damaged, or destroyed due to an unexpected or sudden event like fire, volcanic eruption, flood etc.

Here, Steve's casualty loss will be gotten when we compare both his adjusted basis and the fair market value and then we choose the lesser one. Since $35000 is lesser than $50000, therefore the answer will be $35000.

8 0
3 years ago
Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100
mestny [16]

Answer:

A. 90

Explanation:

nominal GDP = 50*20 + 100*8 = 1800

real GDP = 50*10 + 100*15 = 2000

GDP deflator = (nominal GDP/ real GDP)*100 = (1800/2000)*100 = 90

5 0
3 years ago
Read 2 more answers
You are considering buying common stock in Grow On, Inc. The firm yesterday paid a dividend of $7.80. You have projected that di
Lina20 [59]

Answer:

The answer is $56.68

Explanation:

Solution

We recall that:

The firm paid a dividend of =$7.80

The projected growth of dividends is at a rate = 9.0%

The annual return = 24.0%

Now,

V = ($7.80 * (1.09)/(.24 - 0.9)

= (8.502)/(.24-0.9)

= (8.502) * (-0.66)

= $56.68

Therefore, this would be the most we would pay for the stock. If we paid less than that, our return would be above the 24%.

3 0
3 years ago
The main disadvantage of a monetary union is the loss of national monetary and exchange rate policy independence. lessened polit
anzhelika [568]

Answer:

The correct option is;

Loss of national monetary and exchange rate policy

Explanation:

The disadvantages of the establishment of monetary unions includes;

1) The loss of independence in monetary policy

2) The associated problems that arise due to the the initial establishment of the union

3) Tedious nature of the task of attaining comprehensive capital mobility

The advantages are;

1) Lack of uncertainty in exchange rate variation

2) Reduced cost of doing business

3) Improved fiscal stability as well as control of the inflation rate by supranational central bank.

7 0
3 years ago
Creative Sound Systems sold investments, land, and its own common stock for $37.0 million, $14.3 million, and $38.6 million, res
worty [1.4K]

Answer:

$18.3 million

Explanation:

Financing activities: It includes those activities which comes under the long term liabilities and shareholder equity balance. The issue of shares is an inflow of cash whereas redemption, dividend, and the purchase of treasury stock is an outflow of cash.

The computation of the amount reported as a net cash flows from financing activities is shown below:

Cash flow from Financing activities  

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Net Cash flow from Financing activities           $18.3 million

8 0
3 years ago
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