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valkas [14]
3 years ago
6

A government bond with a coupon rate of 8% makes semiannual coupon payments on January 14 and July 14 of each year. The Wall Str

eet Journal reports the asked price for the bond on January 29 at $1,000.625. What is the invoice price of the bond? The coupon period has 182 days. (Round your answer to 2 decimal places.)
Business
2 answers:
leonid [27]3 years ago
8 0

Answer:

$1003.92

Explanation:

The invoice price is calculated as the reported price plus the accrued interest. Therefore, the formula for accrued interest is shown below:

Accrued Interest =  \frac{Annual coupon payment}{2} * \frac{days since last coupon payment}{days separating coupon payments}

Given that the coupon rate is 8%, therefore the bond pays $80 of coupon payments every year.

January 14 was the day that the last coupon was paid, so it has been 14 days since the last payment.

The coupon period is 182 days.

Therefore, the accrued interest is

= \frac{80}{2} *  \frac{14}{182} \\= 3.297

The invoice price is calculated as:

$1000.625 + $3.297

= $1003.922.

Therefore the invoice price of the bond is $1003.92

Anettt [7]3 years ago
7 0

Answer:

$1,003.92

Explanation:

the invoice price (or dirty price) of the bond = bond's market price + accrued interest:

  • bond market price = $1,000.625 (given by WSJ)
  • accrued interest = (coupon* / days within the period) x days passed since last coupon paid = ($40/182 days) x 15 days = $0.21978 x 15 days = $3.2967

dirty price = $1,000.625 + $3.2967 = $1,003.92

*semiannual coupon = $1,000 x 8% x 1/2 = $40

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2 years ago
On January 1, 2019, Fitbit goes public and issues 50 million shares at $20 per share. Fitbit had 200 million shares prior to goi
Elina [12.6K]

Answer:

$600 million

Explanation:

On January 1, 2020, the balance of common stock & APIC

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Here

Paid-In Capital is $500 millions

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By putting the values, we have:

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Common stock & APIC = $1500 millions - $900 million = $600 million

6 0
2 years ago
What is the process of converting the currency of one country into the currency of another country?
Arada [10]

Answer:

Foreign exchange

Explanation:

The process of converting the currency of one country to another is known as foreign exchange or Forex. Converting or exchanging to a particular currency is buying that currency. One needs to have their home currency or any other currency to convert it to the desired currency.

If both currencies have equal strengths, then one unit of a currency should exchange with one unit of the other. The exchange rate would be one. Since currencies have different strengths, they convert or exchange at different rates.

5 0
2 years ago
Multimarket competition occurs when firms: a. compete against each other in several geographic or product markets. b. sell diffe
Pie

Answer:

A. compete against each other in several geographic or product markets.

Explanation:

Different geographic or product markets often possess different challenges for producers to sell their product. This happen because different cultutres, climate, and social conditions tend to create different needs for the customers.

This is why business experts refers to it as 'multi-market competition'. Even though these companies sell similar product, they require different approach/strategies in order to win over different customers in these markets.

Example for this would be Pepsi and coca cola. They sell similar products world wide, not just in united states. Their competition require them to learn the cultures and customers characteristics from different countries as their target market.

`

4 0
3 years ago
Gerard is a mid-level manager who believes that people do not like to work and try to avoid it. He therefore controls, directs,
liq [111]

Answer:

The correct answer is c. McGregor's Theory X.

Explanation:

Theory X is defined by Douglas McGregor in his 1960s book "The Human Side of Enterprise" as an <em>authoritarian</em> style of management. In the book, McGregor explains that styles of management are greatly influenced by how the manager views people. Theory X is based on the view that workers are inherently lazy and unmotivated, prefer to be directed, do not like to take responsibility and dislike to work in general. In this style of management, it is assumed that the only way to push employees to work is to provide them with incentives or punishments, according to their performance. Also, authority is centralized on a select few and employees are strictly controlled and supervised.

In this particular case, Gerard fits the Theory X style of management, as he coerces and threatens employees to push them to do their jobs. He has the belief that people don't like to work and avoid it.

6 0
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