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
Amiraneli [1.4K]
3 years ago
13

Two 1000 dollar face value bonds are both redeemable at par, with the first having a redemption date 3 years prior to the redemp

tion date of the second. Both are bought to yield 12 percent convertible semiannually. The first bond sells for 813.04 dollars and pays coupons at 8.3 precent convertible semiannually. The second bond pays coupons at 5.3 percent per half year. What is the price of the second bond
Business
2 answers:
ehidna [41]3 years ago
6 0

Answer:

$915.71  

Explanation:

Price of the bond is determined by calculating the present value of all cash flows.

We will use following formula in Excel

=nper(rate,pmt.-pv,fv)

rate = Interest rate = 12% x 6/12 = 6%

pmt = Coupon Payment=$1000 x 8.3% x 6/12=$41.50  

pv = Price of first coupon = $813.04

fv = Face value = $1000

Placinf all the values in the formula

=nper(6%,41.50,-813.04,1000)= 16.00  

Years to maturity=16/2=8 years

The years to maturity of second bond=8+3=11 years

price of second bond=-pv(rate,nper,pmt,fv)

rate = 6%

nper = 11 years x 2= 22

pmt =5.3% x $1000=$53

fv = $1000

Placing values in the formula

=-pv(6%,22,53,1000)=$915.71  

finlep [7]3 years ago
5 0

Answer:

$ 915.71  

Explanation:

In order to determine the second bond price we need to determine the number of years to maturity of the first bond using nper formula in excel.

=nper(rate,pmt.-pv,fv)

rate is the semiannual interest rate of 6% (12%*6/12)

pmt is the semiannual interest=$1000*8.3%*6/12=$41.50  

pv is the current price at $813.04

fv is the face value of $1000

=nper(6%,41.50,-813.04,1000)= 16.00  

The years to maturity=16/2=8 years

The years to maturity of second bond=8+3=11 years

price of second bond=-pv(rate,nper,pmt,fv)

rate is 6%

nper is 11 years multiplied by 2= 22

pmt =5.3%*$1000=$53

fv is $1000

=-pv(6%,22,53,1000)=$915.71  

You might be interested in
A two-year college is often the best choice for students who need additional training or time to explore career options.
coldgirl [10]
True I think okay don't judge me:(
5 0
3 years ago
In 2019, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. T
Yuliya22 [10]

Answer:

Break-even point in units= 1,500

Explanation:

Giving the following information:

Selling price= $600

Unitary variable cost= $420

Fixed cost= $270,000

<u>To calculate the break-even point in units, we need to use the following formula:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 270,000 / (600 - 420)

Break-even point in units= 1,500

8 0
3 years ago
If a company rents a warehouse, it must pay rent for the warehouse whether it is full of inventory or completely vacant. Other e
Aleksandr [31]

As the output is increased or decreased, these (B) fixed costs remain unchanged.

<h3>What are fixed costs?</h3>
  • Fixed costs, also known as indirect costs or overhead costs in accounting and economics, are corporate expenses that are independent of the volume of goods or services generated by the business.
  • They are usually recurrent, such as monthly interest or rent.
  • These expenses are frequently capital expenses.
<h3>Explanation -</h3>
  1. Dependent refers to a variable that changes when other factors change.
  2. Fixed cost refers to a cost that doesn't change when the number of goods produced increases or decreases.
  3. Opportunity cost refers to the benefit that you would have received from the option that was not chosen.
  4. Marginal cost refers to the change in the cost when you produce an additional unit.
  5. According to this definition and as the statement refers to a cost that doesn't change.

Therefore, as the output is increased or decreased, these (B) fixed costs remain unchanged.

Know more about fixed costs here:

brainly.com/question/3636923

#SPJ4

Complete question:

If a company rents a warehouse, it must pay rent for the warehouse whether it is full of inventory or completely vacant. Other examples include executives' salaries, interest expenses, depreciation, and insurance expenses. As the output is increased or decreased, these _______ costs remain unchanged.

a. dependent

b. fixed

c. opportunity

d. marginal

5 0
2 years ago
Can someone please help me
nordsb [41]
Community college students can receive financial aid.

All other options are not true the term financial aid initially derived by the community colleges in order to provide funding to the students who cannot afford to study.
5 0
3 years ago
A company handbook states that employees will be given warnings for three instances of arriving late for work, after which they
zhenek [66]

Answer:

"at-will" simply means the employer can let you go without cause

Explanation:

At-will means that an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability. Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences.

3 0
2 years ago
Other questions:
  • The american manufacturers of pet milk unknowingly introduced their product in french-speaking markets without realizing that th
    9·1 answer
  • What commodities are grown for a purpose other than food?
    15·1 answer
  • In commodity markets it is typically true that: (note: only one statement is correct) Group of answer choices there are only a f
    15·1 answer
  • A high-resolution screen has<br> no pixels.<br> Fewer pixels<br> More pixels
    7·2 answers
  • John is an expediter for a paper goods manufacturer. he has been asked to track how much time he spends traveling to and from ea
    15·1 answer
  • E14-18 Note with unrealistic interest rate; lender; amortization schedule. Amber Mining and Miling, Inc., contracted with Truax
    15·1 answer
  • The issuer of a 5% common stock dividend to common stockholders should transfer from retained earnings to paid-in capital an amo
    12·1 answer
  • Berkshire Inc. had revenues of $379,000 in its first year of operations. The company has not collected on $45,900 of its sales a
    10·1 answer
  • Suppose the real GDP of this economy grows at an annual rate of 5%. Assume that the central bank would like to keep the inflatio
    12·1 answer
  • Suppose you know a company's stock currently sells for $80 per share and the required return on the stock is 9 percent. You also
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!