25)

McCue Inc.'s bonds currently sell for $1,250. They pay a $90 annual coupon, have a 25-year maturity, and a $1,000 par value, but

ratelena [41]

Answer:

YTM = 6.88%.

YTC = 4.26%.

Explanation:

a. Calculation of Yield to Maturity (YTM)

The bond's Yield to Maturity can be calculated using the following RATE function in Excel:

YTM = RATE(nper,pmt,-pv,fv) .............(1)

Where;

YTM = yield to maturity = ?

nper = number of periods = number of years to maturity = 25

pmt = annual coupon payment = $90 = 90

pv = present value = current bond price = $1,250 = 1250

fv = face value or par value of the bond = 1000

Substituting the values into equation (1), we have:

YTM = RATE(25,90,-1250,1000) ............ (2)

Inputting =RATE(25,90,-1250,1000) into excel (Note: as done in the attached excel file), the YTM is obtained as 6.88%.

Therefore, YTM is 6.88%.

b. Calculation of Yield to Call (YTC)

The bond's Yield to call can be calculated using the following RATE function in Excel:

YTC = RATE(nper,pmt,-pv,fv) .....................(3)

Where;

YTM = yield to call = ?

nper = number of periods = number of years to call = 5

pmt = annual coupon payment = $90 = 90

pv = present value = current bond price = $1,250 = 1250

fv = future value of the bond or the amount at which the bond can be called = $1,050 = 1050

Substituting the values into equation (3), we have:

YTM = RATE(5,90,-1250,1050) ............ (4)

Inputting =RATE(5,90,-1250,1050) into excel (Note: as done in the attached excel file), the YTC is obtained as 4.26%.

Therefore, YTC is 4.26%.

Download xlsx

6 0

3 years ago

Factory Overhead Cost Budget Budget that estimates the cost for each item of factory overhead needed to support budgeted product

Black_prince [1.1K]

Answer:

Factory Overhead Cost Budget

For the month ending August 31, 2016

Variable factory overhead costs:

Manufacturing supplies $14,000

Power and light $48,000

Production supervisor wages $135,000

Production control wages $32,000

Materials management wages $39,000

Total variable factory overhead costs $268,000

Fixed Factory Overhead Costs

Factory insurance $30,000

Factory depreciation $22,000

Total Fixed Factory Overhead Costs $52,000

Total factory overhead costs $320,000

Thus, the total factory overhead cost for the month of August, 2016 is $320,000.

4 0

4 years ago

On August 31, 2019, Montana Corporation signed a 4-year contract to provide services for Minefield Company at $30,000 per year.

masha68 [24]

Answer:

The answer is: Montana should recognize its revenue equally throughout the year as they provide their services.

Explanation:

The accrual basis of accounting recognizes revenue when earned. This means that Montana Corporation should recognize revenue when its service has been performed, regardless of when those services were paid. That means they should recognize revenue equally throughout the year (every month) as they provide their services.

8 0

3 years ago

Which of the following statements about feedback is most likely FALSE?a. Research shows that subordinates believe their leaders

makkiz [27]

Answer:

The correct answer is a) Research shows that subordinates believe their leaders give more feedback than their leaders think they do.

Explanation:

Companies use the feedback method to have a fluid and effective communication with their employees and bosses, generally, the feedback provides positive comments about the employee's actions but also what can improve in their work.

Feedback is a method that helps in the development of jobs and improves the work environment in jobs.

For example, the research case shows that subordinates believe that leaders give the necessary comments in the feedback process.

I hope this information can help you.

5 0

4 years ago

When configuring a group of radio button form controls, the value of the ________ attribute on each radio button must be the sam

steposvetlana [31]

The answer in the blank is Contrast

7 0

4 years ago