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frozen [14]
3 years ago
5

Consider a bond (with par value = $1,000) paying a coupon rate of 9% per year semiannually when the market interest rate is only

6% per half-year. The bond has three years until maturity. Find the bond's price today and 6 months from now after the next coupon is paid. ?
Business
1 answer:
dybincka [34]3 years ago
5 0

Answer:

The bond price is $ 926.24  today

The bond price in six months is $ 936.81

Explanation:

Find detailed calculation in the attached spreadsheet.

Download xlsx
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Which of the following would be the best allocation base for the Assembly​ activity? A. Direct labor hours hours B. Number of or
Elden [556K]

Answer:

The best allocation base for assembling activities costs are the number of parts actually assembled.

Since the number of parts is not an option int his question, the second best allocation base for the assembling process is A) direct labor hours.

If the process is highly automated, then the second best allocation base would be machine hours, but that isn't an option either.

8 0
3 years ago
Why was it sometimes difficult to balance a checking account to a statement?
Juliette [100K]
Because sometimes the check written after the statement closing dates.

Lets say a company do a closing statement on December 26.

 A check written between that date until the end of period ( December 26 - December 31), that transaction simply won't appear on the book because the company already closed the statement on December 26
6 0
3 years ago
Problem 14-13 Calculating the WACC [LO3] Dinklage Corp. has 4 million shares of common stock outstanding. The current share pric
sleet_krkn [62]

Answer:

WACC = 8.97%

Explanation:

total value of equity = $70 x 4,000,000 = $280,000,000

cost of equity:

$70 = $4.4935 / (Re - 4.5%)

Re - 4.5% = 6.42%

Re = 10.92%

total value of debt:

$75 million x 0.95 = $71,250,000

YTM = {70 + [(1,000 - 950)/25]} / [(1,000 + 950)/2] = 72 / 975 = 7.3846%

$60 million x 1.07 = $64,200,000

YTM = {60 + [(1,000 - 1,070)/8]} / [(1,000 + 1,070)/2] = 51.25 / 1,035 = 4.9517%

weighted cost of debt = ($71,250,000 / $135,450,000 x 7.3846%) + ($64,200,000 / $135,450,000 x 4.9517%) = 3.8845% + 2.347% = 6.2315%

total value of the firm = $280,000,000 + $135,450,000 = $415,450,000

equity weight = $280,000,000 / $415,450,000 = 0.674

debt weight = 1 - 0.674 =  0.326

WACC = (0.674 x 10.92%) + (0.326 x 6.2315% x 0.79) = 7.36% + 1.605% = 8.965% = 8.97%

8 0
3 years ago
Transactions The selected transactions below were completed by Cota Delivery Service during July: Indicate the effect of each tr
Bezzdna [24]

Answer & Explanation:

1.- Increase    in assets and equity

(cash is asset and common stockequity)

2.- no effect

(one asset cash is rtaded for another, supplies)

3.- Decrease in Assets and Equity

(expense decrease the cash (assets) and equity (income))

4.- Decrease in Assets and Equity

(expense decrease the cash (assets) and equity (income))

5.- Increase   in assets and equity

(cash increase equity increase (service revenue))

6.- Increase   in assets and equity

(account receivable increase equity increase (service revenue))

7.- Decrease  in Assets and Liablity

(ap decrease and cash decrease)

8.- no effect

(one asset increases cash. Another decreases, account receivable)

9.- Decrease in Assets and Equity

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10.- Decrease in Assets and Equity

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5 0
3 years ago
Classify the following items as issuance of stock, dividends, revenues, or expenses. Then indicate whether each item increases o
Alborosie

Answer:

1. Dividends = It will be classified as <u>dividends.</u>

2. Rent Revenue = It will be classified as <u>revenues.</u>

3. Advertising Expense = It will be classified as an<u> expense.</u>

4. Stock holders pay cash into business = It will be classified as <u>Issuance of stock.</u>

<u></u>

Dividends are the share of revenue distributed to stockholders.

Revenues are income earned by the company.

Expense are the outflow of cash or bank payments for running the business.

Issuance of stock refers to collection of money by the company through issuing equity or preference shares.

4 0
3 years ago
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