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
umka2103 [35]
2 years ago
8

On December 31, 2021, Interlink Communications issued 5% stated rate bonds with a face amount of $113 million. The bonds mature

on December 31, 2051. Interest is payable annually on each December 31, beginning in 2022. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $). Determine the price of the bonds on December 31, 2021, assuming that the market rate of interest for similar bonds was 6%.
Table values are based on:
n = 30
i = 6%
Cash Flow Amount Present Value
Interest $111,300,000 $74,454,240
Principal $100,000,000 $13,137,000
Price of bonds $87,591,240

Business
1 answer:
Kazeer [188]2 years ago
4 0

Answer:

Bond Price = $97.4457408 million rounded off to $97.45 million

Explanation:

To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,

Coupon Payment (C) = 113 million * 0.05 = 5.65 million

Total periods (n) = 30

r or YTM = 0.06 or 6%

The formula to calculate the price of the bonds today is attached.

Bond Price =5.65 * [( 1 - (1+0.06)^-30) / 0.06]  +  113 / (1+0.06)^30

Bond Price = $97.4457408 million rounded off to $97.45 million

You might be interested in
In today's organization, many employers appear to prefer to work for a supervisor with a ________ leadership style.
vova2212 [387]
<span>A supervisor in today's work environment needs to be flexible and adaptable. Employees today expect a lot more opportunities to do things such as work from home. Also in today's more technological world, demands on the supervisor and employer change frequently. Because of all of this, employers and employees prefer a people-centered leadership style.</span>
3 0
3 years ago
"An NMS stock is current quoted at $16.10 Bid - $16.30 Ask. A customer wishes to place an order to buy 1,000 shares of the stock
slega [8]

Answer:

"An NMS stock is current quoted at $16.10 Bid - $16.30 Ask. A customer wishes to place an order to buy 1,000 shares of the stock at $16.111. The registered representative should:"

buy the 1,000 shares of NMS stock when the price is $16.111 or below.

Explanation:

This order by the customer is a limit order.  It indicates the price at which the registered representative should buy the stock of NMS.  A limit order means that the order can only be filled at the specific price or better (below the limit).  It is not like a stop order which triggers at the specified price and will then be filled at the prevailing market price, whether it is below or above the stated price.

4 0
3 years ago
A "foreign bond" issue is
cupoosta [38]

Answer:

d. both b and c

A foreign bond is when a foreign entity issues a bond in a local market and in local currency so for example if a Italian company issued a bond to borrow money from American markets, and the bond was issued in USA and it's currency was dollars then it would be classified as a foreign bond so in this case both B and C are correct because a German MNC issuing dollar denominated bonds is an example of a foreign entity issuing a bond in a local market denominated in local currency, and a bond issues by a foreign borrower to investors in national market and denominated in that nation's currency is also an example of a foreign bond

Explanation:

7 0
2 years ago
On January 1, 2021, Cullumber Inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the
Alenkinab [10]

Answer & Explanation:

December 31, 2021

Compensation Expense                                              164,200

                        Paid-in Capital (328,400 x 0.5)                        164200

                      To record compensation expense

April 1, 2022

Paid-in Capital                                                               32,840

          Compensation Expense (328,400 x 2100/21000)    32,840

         To record termination of stock option

December 31, 2022

Compensation Expense                                                147,780

          Paid-in Capital (328,40 x 1/2 x 18900/21000)              147,780

        To record compensation expense

March 31 , 2023

Cash ( 12,600 x $25)                                                        315,000

Paid-in Capital (328,400 x 12,600/21,000)                      197040

            Common Stock (21,000 x $10)                                            126,000

             Paid-in Capital in Excess of Par                                         386,040

         To record exercise of stock option

December 31, 2023

6,300 stock options not exercised (21,000 - 2,100 - 12,600)

5 0
2 years ago
Lundy Company purchased a depreciable asset for $99,000 on January 1. The estimated salvage value is $18,000, and the estimated
Mariulka [41]

Answer:

$16, 988.4

Explanation:

The asset has a useful life of 9 years. the straight-line rate of depreciation is 1/9 X 100 = 11 per cent

the cost of the asset is $99,000

First-year depreciation under double-declining will be

Straight-line method rate x 2= 22 %

= 22/100 x 99,000

=0.22 x 99,000

=21,780

the book value after the first year will be 99,000 -21, 780

= 77,220

Depreciation expense for the second year = 22 % of 77,220

=22/100 x 77,220

=$16, 988.4

7 0
3 years ago
Other questions:
  • Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in
    12·1 answer
  • Franklin designs purchased the patent of a new couch design. the patent had a remaining life of 18 years, so franklin amortized
    5·1 answer
  • what is the economic term for the practice of assigning small parts of a complicated job to individual workers who sepcialize in
    14·1 answer
  • Accounts receivable turnover and days’ sales in receivables For two recent years, Robinhood Company reported the following: 20Y9
    5·1 answer
  • In order to decrease their level of pollution, Jean and Rhonda decided to _______.
    13·2 answers
  • Hedge funds are low risk because they are market-neutral. low risk if they buy Treasury bonds. low risk because they hedge their
    15·1 answer
  • In which system is private property found?
    5·2 answers
  • You try to evaluate an investment project for a company. A firm uses $38 million of debt and $15 million of preferred stock. The
    14·1 answer
  • Pls help
    5·1 answer
  • When filing your tax return, what is the maximum amount you can deduct for a capital loss?.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!