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ser-zykov [4K]
3 years ago
10

Assume that you wish to purchase a 20-year bond that has a maturity value of $1,000 and makes semiannual interest payments of $4

0. If you require a 10 percent nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
Business
1 answer:
Savatey [412]3 years ago
5 0

Answer:

$828.36

Explanation:

As for the information provided,

The value = $1,000

Life = 20 years, since interest is semi annual, effective period = 20 \times \frac{12}{6} = 40 periods.

Semi annual interest = $40

Annual interest = 10%, effective interest rate = 5%

Future Value Interest rate = $40 \times (\frac{1}{(1+0.05)^1} +\frac{1}{(1+0.05)^2} +\frac{1}{(1+0.05)^3} +\frac{1}{(1+0.05)^4} +\frac{1}{(1+0.05)^5} +\frac{1}{(1+0.05)^6} +\frac{1}{(1+0.05)^7} +.................. + \frac{1}{(1+0.05)^4^0} )

= $40 \times 17.159 = $686.36

Future Value of Principal = $1,000 \times \frac{1}{(1 + 0.05)^4^0}

= $1,000 \times 0.142 = $142

Thus, current price of bond = $686.36 + $142 = $828.36

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The answer is 20%, 40 is 1/5 of 200, therefore it is 20%
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What is the problem with creating a promotional message to use for all countries?
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Answer:

Different countries have different advertising/promotional laws. Plus you have no target market if you're creating a promotional message to use for all countries. Also, assuming if your promotional message inspired, say a person in Africa, a person in Russia, a person in China, and a person in Japan bought a product from your promotion, you would have to ship to all of those countries with extreme shipping rates.

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Which of the following is an advantage of pursuing the​ employment-stability policy of follow demand exactly​? A. Minimizes labo
AleksAgata [21]

Answer:

C. Minimizes​ hiring, layoff, and unemployment costs

Explanation:

The employment-stability policy is a policy that aims to provide security and stability to employees of a company or industry. For workers, this is good because it creates greater security for planning the future of their lives. For businesses, it all depends. If workers keep output at a good level, firms will gain by reducing their spending on hiring research and layoffs.

There is a discussion among economists about the effectiveness of this policy for the economy. Some find it beneficial and others find it can slow down the productivity of workers and the economy as a whole.

5 0
3 years ago
Refer to Stevenson, Ross, and Warner. Which of the following represents a key component of the Sarbanes-Oxley Act relating to co
antoniya [11.8K]

Answer:

The correct answer is B. Accounting firms are prohibited from providing many types of consulting services to the companies they audit.

Explanation:

The main reason for this policy is that it does not allow conflicts of interest to arise that eventually produce widely known cases of fraud, such as those presented at the Enron and Worldcom companies.

The Enron case broke out in the U.S. when that energy giant announced what was once the biggest bankruptcy in the history of the country, with a debt of 31,000 million dollars, something overcome a few months later by the collapse of another colossus, WorldCom.

In June 2002 WorldCom, the second US telephone. and of the world, he admitted that he had lied in his accounting books for almost 4,000 million dollars and his actions - which shortly before touched his maximum of 16 dollars - collapsed to 20 cents. His bankruptcy exceeded Enron's: $ 35 billion of liabilities.

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3 years ago
Raul wants to join the directors of World Trade but currently owns no shares in the company. He knows that no one else will help
erica [24]

Answer:

$294,412.8

Explanation:

In order to obtain a seat on the board of directors, Raul must hold more than 50 percent of the total number of outstanding shares if there are three open seats and straight voting occurs.

Total number of shares required = (46,000 ÷ 2) + 1

= 23000 + 1

= 23,001 shares

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Total amount = Total number of shares required × Market price of share

= 23,001 × $ 12.80

= $294,412.8

The amount Raul wants to invest on obtaining a seat on board of directors is $294,412.8

7 0
2 years ago
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