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olchik [2.2K]
3 years ago
13

Fooling Company has a callable bond outstanding with a coupon of 10.4 percent, 25 years to maturity, call protection for the nex

t 10 years, and a call premium of $75. What is the yield to call (YTC) for this bond if the current price is 110 percent of par value? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Business
1 answer:
erastovalidia [21]3 years ago
8 0

Answer:

The yield to call for this bond is 9.30%

Explanation:

Yield to call

The rate of return bondholders receives on a callable bond until the call date is called Yield to call.

Now use the following formula to calculate the Yield to call

Yield to Call = [ C + ( F - P ) / n ] / [ ( F + P ) / 2 ]

Where

F = Face value = $1,000 ( Assumed )

C = Coupon Payment = Face value x Coupon rate = $1,000 x 10.4% = $104

P = Call price of the bond = Face value + Call Premium = $1,000 + $75 = $1,075

n = Numbers of years to call = 10 years

Placing vlaues in the formula

Yield to Call = [ $104 + ( $1,000 - $1,075 ) / 10 years ] / [ ( $1,000 + $1,075 ) / 2 ]

Yield to Call = 0.0930

Yield to Call = 9.30%

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Northern university wants to determine the average starting salary for last year's graduates of its college of business. what is
kkurt [141]

All of Northern's College of Business graduates from the previous academic year has begun employment.

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6 0
1 year ago
Assume that Parker Co. will receive SF200,000 in 360 days. Assume the following interest rates: U.S. Switzerland 360-day borrowi
frez [133]

Answer:

d. $96,914

Explanation:

Parker Co. can execute money market hedge in following steps:

(1) Parker Co. pledges Receivable of SF200,000 to borrow SF190,476 with rate 5% in Switzerland; SF190,476 = SF200,000/ (1+5%)

so it has to pay interest expense of SF9,524 in 360 days. The receivable of SF200,000 is enough for both principal and interest in 360 days.

(2) Then it sells SF190,476 at spot rate $0.48 to get $91,428

(3) Then it deposits $91,428 in US with rate 6% to get back $96,914 in 360 days ; $96,914 = $91,428 * (1+6%)

3 0
3 years ago
What effects does this journal entry have on the accounts? decrease cash and increase land decrease cash and decrease land incre
mezya [45]

Answer:

Decrease cash and increase land

Explanation:

The transaction is:

Account             Debit        Credit

Land                $105,000

Cash                                  $105,000

Purchased land for business.

Both land and cash are assets: they are debited when they increased, and they are credited when they decrease.

Because cash was used to purchase the land, cash decreases and land increases.

3 0
3 years ago
At its $60 selling price, Atlantic Company has sales of $15,000, variable manufacturing costs of $4,000, fixed manufacturing cos
mash [69]

Answer:

$36

Explanation:

The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price.

Selling price is $60

Contribution margin per unit?

The total sales in dollar value are $15,000, The sales in units equal to

=$15,000 /60

=250 units

Total variable costs will include variable manufacturing cost plus variable selling and administrative costs

=$4000 + $2000

=$6000

variable cost per unit will be the total variable cost divide by units produced

=$6000/250

=$24

Contribution margin per unit = $60- $24

=$36

6 0
3 years ago
Toby operates a small deli downtown. the deli industry is monopolistically competitive. toby says he is producing the quantity t
evablogger [386]
Here is the answer that completes the statement above.
Regarding the situation of Toby who runs a small deli downtown, if he is already maximizing his profits, therefore, we can say that the number or amount of delis will soon increase or rise. Hope this answers your question.
5 0
3 years ago
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