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Mazyrski [523]
3 years ago
14

You find a zero coupon bond with a par value of $10,000 and 14 years to maturity. The yield to maturity on this bond is 5.1 perc

ent. Assume semiannual compounding periods. What is the price of the bond
Business
1 answer:
Lelechka [254]3 years ago
7 0

Answer:

Bond Price = $4940.8468 rounded off to $4940.85

Explanation:

The price of a zero coupon bond is simply calculated by calculating the present value of the face value of the bond that the bond pays at maturity. The formula for the price of a zero coupon bond is,

Bond Price = Face Value / ( 1 + r )^n

Where,

  • r is the rate or YTM
  • n is the number of periods left to maturity

Assuming that the r or YTM is always stated in annual terms, the semi annual YTM will be 5.1% / 2 = 2.55%

Assuming semi annual compounding periods, the total number of periods or n will be,

n = 14 * 2 = 28

Bond Price = 10000 / (1 + 0.0255)^28

Bond Price = $4940.8468 rounded off to $4940.85

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Answer:

A. When a firm spends a large amount of money on advertising, advertising can be construed as a signal of quality. 

Explanation:

When a firm spends a large amount of money in advertising its product, it means that the company is confident about its product and is willing to spend a lot because they know their product would be a success

I hope my answer helps you

6 0
4 years ago
on December 1, 2021, Lester Company issued at 103, eight hundred of its 9%, $1,000 bonds. Attached to each bond was one detachab
Luden [163]

Answer:

$489,250

Explanation:

Market value of bonds and stock warrants

= ((500*1000*0.95)+(500*50))

= 475000+25000

= $500,000

Issue price bonds = 500000*1.03

= 515000

Carry value of bonds = ((500*1000*0.95)/500000)*515000

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= $489,250

7 0
3 years ago
It is logical to conclude that water can dissolve lemonade powder because the mix is
Basile [38]
I got polar but I'm not completely sure, I hope this helped a little:)
7 0
3 years ago
Read 2 more answers
A scrum team is only allowed to meet with stakeholders during sprint review
const2013 [10]
The Answer is (b) False

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In such a development framework, scrum team works closely with all stakeholders involved from the very first day.

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6 0
3 years ago
An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $7,900. If Allowance
ad-work [718]

Answer:

option d) debit to Bad Debt Expense for $7,200

Explanation:

Data provided :

Total estimated uncollectible receivables of the company = $ 7,900

credit balance for the allowance for doubtful accounts  =  $ 700

Therefore,

the net bad debt expenses of the company = $ 7,900 - $ 700 = $ 7,200

Hence,

the<u> correct answer is </u><u>option d) debit to Bad Debt Expense for $7,200</u>

7 0
4 years ago
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