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
aleksandrvk [35]
3 years ago
13

Ben owns investment A and 1 bond B. The total value of his holdings is $2,800. Bond B has a coupon rate of 8.80 percent, par val

ue of $1000, YTM of 9.40 percent, 14 years until maturity, and semi-annual coupons with the next coupon due in 6 months. Investment A is expected to pay annual cash flows to Ben of X per year forever with the first annual cash flow expected in 1 year from today. The expected return for investment A is 7.91 percent. What is X, the fixed annual cash flow that will be paid forever by investment A?
Business
1 answer:
NeTakaya3 years ago
6 0

Answer:

Bond B

PV= ?

FV=$1000

YTM = 9.40/2=4.70

N=14*2= 28

PMT= 8.8%*1000/2=44

Put values in financial calculator

PV=$953.8

Price of Investment A= 2800-953.8=1846.2

Investment A = Perpetuity, formula for perpetuity is Present Value= Cash Flow/Interest Rate

1846.2=Cash flow/0.0791

Cash Flow= 1846.2 *0.0791

=$146.03

Explanation:

You might be interested in
Social security and medicare are
Ber [7]
Social safety programs that Americans pay into during their working years through taxes. Both are designed to assist older Americans and distribute benefits to the disabled and their families.

Hopes This Helps
4 0
3 years ago
Read 2 more answers
These too. Again I will post more
Varvara68 [4.7K]

The answer is D




hope it helps :P


7 0
3 years ago
money that is provided by the defendant to ensure his or her appearance in court is reffered to as----------------.
faust18 [17]

Answer:

Bail

Explanation:

Bail is just a measure of cash that is saved with the court to guarantee that you appear for all court procedures. You can post your bail in real money with the court, and you will at that point be discharged from authority.  

In the event that the litigant needs more money to post the whole bail, the court will acknowledge a bail security.  

The reason for bail is to guarantee that a respondent returns for future court appearances.

8 0
3 years ago
What type of budget is used to forecast income and expense over some period of years?
taurus [48]

A stabilized budget is used to forecast income and expense over some period of years.

<h3>What is A stabilized budget?</h3>

A budget that forecasts income and expenses over a short period of time, typically five years, is considered steady. a property's rent roll. can be used to calculate the potential annual rental income of a property.

After construction or a large refurbishment, the projected rental income, cost, or Net Operating Income Example: Stabilized income was predicted two years after an office building opened.

Thus, A stabilized budget is used to forecast income and expense

For more details about stabilized budget, click here:

brainly.com/question/12499375

#SPJ4

8 0
2 years ago
Kenny Electric Company's noncallable bonds were issued several years ago and now have 20 years to maturity. These bonds have a 9
murzikaleks [220]

Answer:

d. 5.08%

Explanation:

We have to first calculate the YTM of the bond, and then apply the tax shield.

To get the YTM we have to calculate the rate of return of an annuity of 46.25 for 20 years compounding semiannually at IRR rate and the present value of the face value redeem in 20 years.

C \times \frac{1-(1+r)^{-time} }{rate} +Face\:Value/(1+rate)^{time}= PV\\

46.25 \times \frac{1-(1+IRR/2)^{-20*2} }{rate} + 1000/(1+IRR)^{20}= 1075\\

IRR = 0.084656891 (it should be done using financial calculator or excel or a similar software program)

then we apply the shield tax to the IRR:

IRR x (1 - tax-rate) = Cost of debt

0.084656891 * ( 1 - 0.4) = 5.0794= 5.08

3 0
3 years ago
Other questions:
  • Alden Trucking Company is replacing part of its fleet of trucks by purchasing them under a note agreement with Kenworthy on Janu
    10·1 answer
  • Trisha and Josh recently adopted a child, Julie. Before the adoption, Trisha, Josh, and Julie's biological parents worked out an
    11·1 answer
  • Brief Exercise 4-08 In 2020, Kingbird Corporation reported net income of $1,171,600. It declared and paid preferred stock divide
    13·1 answer
  • _____ has always been a feature of the taiwanese economy but experts warn that the _______ ________ ________ will hamper growth
    11·2 answers
  • Suppose the total number of minutes provided exceeds the total number of minutes estimated and that the total dollar cost of the
    11·1 answer
  • Nell and Kirby are in the process of negotiating their divorce agreement. What should be the tax consequences to Nell and Kirby
    13·1 answer
  • Kathleen is a member of the human resource department at Jade Corp. Setting a goal to enhance the firm's strategy, Kathleen work
    10·1 answer
  • What is the business?
    7·1 answer
  • 2) Assume that you invest 5 percent of your salary and receive the full 5 percent match from East Coast Yachts. What EAR do you
    13·1 answer
  • What methods show the property sheet? Check all that apply.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!