1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Mamont248 [21]
3 years ago
14

Noncallable bonds that mature in 10 years were recently issued by Sternglass Inc. They have a par value of $1,000 and an annual

coupon of 5.5%. If the current market interest rate is 7.0%, at what price should the bonds sell
Business
1 answer:
sergejj [24]3 years ago
3 0

Answer:

Price  of Bond= $907.766

Explanation:

The price of the bond is the present value of its future cash flow discounted at the required rate of return of 5.5%.

Price of Bond = PV of interest payment +PV of redemption value

<em>PV of interest payment:</em>

interest payment = 5.5%× 1000= 55

PV = A × (1+r)^(-n)/r

A- 55, r - 7%, n- 10 years

PV = 55, r- 5.5%, n- 10

PV = 55× 1.07^(-10)/0.07= 399.417301

<em>Present Value of redemption </em>

PV = F× (1+r)^(-n)

F= 1000, r- 7%, n- 10 years

PV = 1,000× 1.07^(-10)= 508.3492921

Price  of Bond =  508.3492921  + 399.417301= 907.7665931

Price  of Bond= $907.766

You might be interested in
the total estimated cost of attending a public year to year college is 2265. The cost of attending a college is expected to incr
Anna11 [10]
5% of 2265$ is 113,25$
Because 5% is 5/100 so 5 x 2265$ = 11325$
11325$ : 100 = 113,25$
Second year cost is the first year’s plus 5% so
2265$ + 113,25$ = 2378,25$ (second year cost)
8 0
3 years ago
A ________ state is one with unstable leadership, whose policies are driven by ideology rather than by economic or human costs a
stepan [7]

A rogue state is one that has unstable leadership and the policies are driven by ideologies instead of economic costs or benefits.

<h3>What is a state?</h3>

A state is a territory that belongs to one country. It is having its own government which runs that particular state or province.

A rogue state is a kind of state which is responsible for shattering and disrupting global laws and is also considered a danger to other countries or nations in the whole world. North Korea, Libya, Iran, Iraq, and Cuba are labeled as rogue states. These states are not driven by an economy and are actually driven by the ideologies developed by their presidents.

Therefore, the state is driven by ideologies instead of an economy that is considered to be a rogue state.

Learn more about the rogue state in the mentioned link:

brainly.com/question/3500231

#SPJ1

7 0
2 years ago
2. Simplify the following<br><br><br><img src="https://tex.z-dn.net/?f=%20%28%5Cfrac%7B1%7D%7Ba%7D%20%20-%20%20%5Cfrac%7B1%7D%7B
MAXImum [283]
1/a - 1/b -1
Just remove the parentheses
6 0
3 years ago
Price is the _____________ a consumer is willing to make to acquire a specific product or service.
vfiekz [6]

Answer:

Overall sacrifice

Explanation:

Price is associated with the amount of money that a consumer have to pay to purchase a articular product. Overall sacrifice is that amount of money which is sacrificed by the consumer to acquire a particular product or service. Price of the product is set by the seller in the market and it is totally depends upon the willingness of the consumer to buy the product at the prevailing prices or not.

3 0
3 years ago
4. If your checking account's balance is
levacccp [35]
A. $2164.89
Basically just subtract, 3,678.89-1514 = 2,164.89
6 0
3 years ago
Other questions:
  • Theuniversityadministrationassuresamathematicianthathehasonly1chancein 10,000 of being trapped in a much-maligned elevator in th
    11·1 answer
  • The ____, implemented in 2001, grants federal authorities expanded surveillance and intelligence-gathering powers, such as broad
    6·1 answer
  • Which were important characteristics of Sparta's government? Select the two correct answers.
    8·2 answers
  • The advanced machinery used for limestone quarrying in a particular region leads to noise pollution and affects the hearing abil
    9·1 answer
  • Suppose that over the past year, the nominal interest rate was 5 percent, the CPI was 150.3 at the end of the year, and the CPI
    9·1 answer
  • Thompson’s house was destroyed by fire and claims were filed with the insurance company. The insurance company (insurer) hired C
    9·1 answer
  • The signing of the project portfolio statement signals the transition from the high-level project initiating stage into the more
    10·1 answer
  • Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are.
    15·1 answer
  • A perfectly price-discriminating monopolist is able to a. maximize profit and produce a socially optimal level of output. b. pro
    9·1 answer
  • Starting from a​ full-employment equilibrium, an increase in aggregate demand​ ______, and creates​ ______ gap.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!