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pickupchik [31]
3 years ago
10

The price of a bond with no expiration date is originally $1,000 and has a fixed annual interest payment of $150. If the price o

f the bond then falls by $100, what will be the interest rate yield to a new buyer of the bond
Business
2 answers:
stiv31 [10]3 years ago
6 0

Answer:16.67%

Explanation:

Given the following;

Bond price = $1000

Coupon rate = $150 (amount of interest paid on the bond annually)

Calculating the yield rate of the bond to a new buyer.

The price of the bond has fallen by $100

Therefore,

New bond price = $1000 - $100 =$900

Therefore, the yield rate is given by;

(Coupon value/bond price) × 100

(150/900) × 100

1.667 × 100 =16.67%

Lelu [443]3 years ago
4 0

Answer:

16.7 percentage

Explanation:

bond price = $1000 - $100 = $900

fixed amount / bond price * 100 = IR

(150/900) * 100 = 16.7%

The reason for this equation is that interest rate is the amount a lender charges for the use of assets expressed as a percentage of the principal.

originally the price if the bond is $1000 which later falls by $100, so that leaves us to a $900 bond rate.

The interest rate is typically noted on a annual basis known as the annual percentage rate (APR).

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Kim hires michelle to go to the art gallery and purchase a specific painting for him. the painting costs $1,500. because this is
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Prepare a pro forma balance sheet, assuming a sales increase of 15 percent, no new external debt or equity financing, and a cons
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Answer:

pro forma Balance sheet

                             old increased

   

assets    

non current assets   37800 43470

net PPE                   37800 43470

Current assets   15400 17710

Inventory          9000 10350

Accounts receivable  3900 4485

cash                      2500  2875

   

total assets           53200 61180

   

Equity & Liabilities    

common stock    15000 15000

retained earnings   6800 13930

total                           21800 28930

Liabilities    

long term debt   24000 24000

   

Current liabilities   7400 7760

Accounts payable   2400 2760

notes payable   5000 5000

   

total                             53200 60690

EFN = 61180 - 60690 = 490

PAYOUT RATIO = dividends / net income

additions to retained earnings = net income less dividends

Explanation

Retained earnings = old retained earnings plus additions to retained earnings = 6800 + 7130 =13930

Missing parts of the Question

Consider the following income statement for the Heir Jordan Corporation:

 

HEIR JORDAN CORPORATION

Income Statement

 Sales     $ 48,500  

 Costs      34,500  

 Taxable income     $ 14,000  

 Taxes (35%)      4,900  

 Net income     $ 9,100  

     Dividends $ 2,900      

     Addition to retained earnings  6,200      

 

The balance sheet for the Heir Jordan Corporation follows.

 

HEIR JORDAN CORPORATION

Balance Sheet

Assets  Liabilities and Owners’ Equity  

 Current assets      Current liabilities    

   Cash $ 2,500      Accounts payable $ 2,400  

   Accounts receivable  3,900      Notes payable  5,000  

   Inventory  9,000        Total $ 7,400  

     Total $ 15,400    Long-term debt $ 24,000  

 Owners’ equity    

 Fixed assets        Common stock and paid-in surplus $ 15,000  

   Net plant and equipment $ 37,800      Retained earnings  6,800  

     Total $ 21,800  

 Total assets $ 53,200    Total liabilities and owners’ equity $ 53,200  

   

1.Prepare a pro forma balance sheet, assuming a 10 percent increase in sales, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

2.Calculate the EFN. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

8 0
3 years ago
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