The calculated worth of the given U.S. Treasury bond today is mathematically given as $3634.23.
<h3>What does a Treasury bond do?</h3>
Treasury bonds (sometimes known as T-bonds) are fixed-rate debt instruments issued by the US government, with maturities ranging from 10 to 30 years. T-bonds offer semi-annual interest payments up until maturity, when the owner is given the bond's face value.
<h3>Do Treasury Bonds pay interest monthly?</h3>
Interest on my savings bonds is paid monthly. The bond's interest rate is applied to a fresh principal amount every six months because interest is compounded semi-annually. The total of the former principal and the interest accrued over the preceding six months makes up the new principal.
<h3>Briefing:</h3>
The present worth of the U.S. Treasury bond is given by:
Future value/(1 + interest rate)(no. of years)
4.475/(1 + 4.25)⁵
2.500/(1.0425)⁵
3634.23
Present worth is =$3634.23
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Answer and Explanation:
NASAA = North american Securities Administrators Association
NASAA would require written authority in order for trading as expressed by client to a third party. The written authority is very important according to the regulations by NASAA.
Measures the extent to which demand for a product changes due to a change in its price.
Answer:
If the firm uses less leverage, its ROE will decrease since the cost of equity is much higher than the cost of debt. If all debt is eliminated, then ROE will decrease to 7.764% from 10.83%.
Explanation:
net income = $9.75 million
capital structure:
- $90 million equity
- $60 million debt
interest rate = 4% and tax rate = 21%
current return on equity (ROE) = $9.75 / $90 = 10.83%
current return of assets (ROA) = $9.75 / $150 = 6.5%
cost of debt = 4% x (1 - 21%) = 3.16%
if the company issues more equity to lower debt to 0, then:
net income = $9.75 + [$60 million x 4% x (1 - 21%)] = $9.75 + $1.896 = $11.646 million
return on equity (ROE) = $11.646 / $150 = 7.764%
return of assets (ROA) = $11.646 / $150 = 7.764%
Answer:
0.82
Explanation:
Calculation to determine the firm's asset beta
Using this formula
Firm's asset beta=Equity beta/(1+/D/E)
Let plug in the formula
Firm's asset beta=1.2/(1+0.47)
Firm's asset beta=1.2/1.47
Firm's asset beta=0.816
Firm's asset beta=0.82 (Approximately)
Therefore the firm's asset beta is 0.82