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ZanzabumX [31]
4 years ago
14

New Business Ventures, Inc., has an outstanding perpetual bond with a coupon rate of 11 percent that can be called in one year.

The bond makes annual coupon payments and has a par value of $1,000. The call premium is set at $125 over par value. There is a 60 percent chance that the interest rate in one year will be 13 percent, and a 40 percent chance that the interest rate will be 9 percent. If the current interest rate is 11 percent, what is the current market price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Virty [35]4 years ago
8 0

Answer:

961.88

Explanation:

First, examine whether the bond will be called if interest rate falls to 9%. The call price is

1,000 + 125 = 1,222. Bond price at 9% yield will be

$110/0.13 > call price of 846.15

Bond will be called. The price of the callable bond therefore is:

=+[.60(846.15)+.40(1125)]/1.11+110/1.11 =961.88

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Jenna composes an email from home to her boss to inform him that she will be late getting to work that day. The act of composing
faust18 [17]

Answer:

Encoding the message

Explanation:

Composing of an email by Jenna is the communication process of encoding message.

there are various stages of communication but the one in the above question is encoding of message.

Encoding a message means compiling or creating the message for the receiver with the aim of the receiver being able to understand the information and be able to reply as well.

Jenna sends the email using coded meanings as well as globally comprehensible words to create the email.

Cheers.

8 0
3 years ago
Read 2 more answers
If a gain of $11,000 is realized in selling (for cash) office equipment having a book value of $55,000, the total amount reporte
RideAnS [48]

Answer:

The answer is B. $66,000

Explanation:

What are the items under investing activities of cash flow? - Sale and purchase of long-term assets or non-current assets. Purchase is an outflow while sale is an inflow.

The book value of the sold equipment was $55,000 and gain was $11,000. Therefore the equipment was sold for:

$55,000 + $11,000

=$66,000.

So there was an inflow of $66,000.

The $11,000 gain will be shown under operating section of the cash flow.

4 0
4 years ago
Universities are typically organized by departments or colleges such as business, biology, engineering, political science, and s
Goshia [24]

The University creates many departments for different fields of study. This structure has been institutionalized since primitivity to enable group of people with same academic interest, and Long & short term career goals share ideas, knowledge and learn together in same environment. This structure is ideal and supportive and allows for complete focus on one's area of interest. However, this structure is currently being modified and may entirely change in the nearest future as there have being increasing overlaps between courses of different field. Multidisciplinary departments have come in handy with research that help in preserving humanity just as Biology is overlapping with different fields of study to find cure for the ravaging Covid-19.

8 0
4 years ago
"Forman and Berry are forming a partnership. Forman will invest a building that currently is being used by another business owne
dimaraw [331]

Answer:

The amounts to be recorded for the building and for Forman's Capital account are $80,000 and $60,000 respectively

Explanation:

According to the accounting principles, the fixed assets should be recorded at cost or market value whichever is lower

So, in the question, it is mentioned that the building has a market value of $80,000  so by $80,000 the building is recorded.

And, for the Forman's Capital account, the $60,000 should be recorded because we have to deduct the $20,000 building mortgage from the market value of the building so that the accurate value can be come.

3 0
3 years ago
Last year Anderson Corporation reported a cost of goods sold of $101,000. The company's inventory at the beginning of the year w
mash [69]

Answer:

$113,200

Explanation:

Data provided

Cost of goods sold = $101,000

Increase in Inventory = $8,100

Decrease in Accounts payable = $4,100

The calculation of Adjusted cost of goods sold is shown below:-

Adjusted cost of goods sold = Cost of goods sold + Increase in Inventory + Decrease in Accounts payable

= $101,000 + $8,100 + $4,100

= $113,200

Therefore for computing the adjusted cost of goods sold we simply applied the above formula.

6 0
4 years ago
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