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Setler79 [48]
3 years ago
12

YIELD TO MATURITY Harrimon Industries bonds have 6 years left to maturity. Interest is paid annually, and the bonds have a $1,00

0 par value and a coupon rate of 10%. What is the yield to maturity at a current market price of (1) $865 and (2) $1,166? Would you pay $865 for each bond if you thought that a "fair" market interest rate for such bonds was 12%—that is, if ? Explain your answer.

Business
1 answer:
Sloan [31]3 years ago
5 0

Answer:

1) 13.42%

2) 6.56%

Explanation:

a. Given:

Par value of bonds (FV) = $1,000

Coupon rate = 10%

Coupon payment (pmt) = 0.1 × 1,000 = $100

Present value of bond = $865

Maturity period (nper) = 6

Use spreadsheet function =rate(nper,pmt,-PV,FV)

Yield to maturity when price of bond is $865 is 13.42%

2) If PV is $1166, then yield to maturity is 6.56%

If interest rate is 12%

FV is $1,000

Pmt is $100

nper = 6

The use spreadsheet function =PV(rate,nper,pmt,FV) to compute present value of bond.

Present value of bond is $917.77

Since present value of bond is more high, one can pay $865 for each bond.

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Answer:

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Explanation:

To compute depreciation expense of an asset using straight-line method of depreciation, the information we needed is 3,

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3 years ago
Assume that the friend in the previous question notified the owner of the office building of the assignment. When the work was c
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Answer:

Stop assuming then....hehe haha don't know ur previous ques and too lazy to open it and even too lazy to read it full sorry

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2 years ago
There is conflict and distrust in the team. Glen, the team leader, doesn't think the team members are working enough. The team m
iogann1982 [59]

There is conflict and distrust in the team. Glen, the team leader, doesn't think the team members are working enough. The team members, on the other hand, don't think Glen trusts them to do their jobs. You want to resolve this conflict and make sure it doesn't happen again-<u>This can be achieved by using Conflict Management technique</u>

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<u> 3)Be patient while making decision. </u>

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Emotional outbursts or coercing people may stop the problem temporarily, but do not fool yourself into thinking it is a long-term solution. Odds are the problem will resurface. At that point not only will you have the initial problem to deal with, but also the angry feelings that have festered below the surface during the interim.

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<u>7) Keep the communication open. </u>

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<u> 8. Act decisively. </u>

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