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Katen [24]
3 years ago
15

Again, Inc. bonds have a par value of $1,000, a 25 year maturity, and an annual coupon rate of 8.0% with annual coupon payments.

The bonds are currently selling for $868. The bonds may be called in 6 years for 108.0% of par. What quoted annual rate of return do you expect to earn if you buy the bonds and company calls them when possible?
a) 9.39%
b) 12.21%
c) 13.42%
d) 10.13%
e) 8.30%
Business
1 answer:
algol [13]3 years ago
8 0

Answer:

b) 12.21%

Explanation:

The computation of the quoted annual rate of return is shown below:

Given that

Future value = $1,000 × 108% = $1,080

Present value = $868

NPER = 6 years

PMT = $1,000 × 8% = $80

The formula is shown below:

= RATE(NPER;PMT;-PV;FV;TYPE)

The present value comes in negative

After applying the above formula, the annual rate of return is 12.21%

Therefore the correct option is b.

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True or false: short-term fluctuations in real gdp are irregular and unpredictable.
raketka [301]
True!
Hope this helps!
4 0
3 years ago
Tom, Mary and Jill have apartments in the same building. A security system for their building costs $750. Tom is willing to pay
SSSSS [86.1K]

Answer: The efficient outcome is to have the security system installed. After the meeting the security system will <em><u>be installed</u></em>, which illustrates the <em><u>free rider problem.</u></em>

Free rider is the burden on resource which is been shared, the problem is created by its usage or over-exploitation by individual who aren't paying their fair share.

∴ Here Tom is a free rider. i.e. He is willing to pay $100 where he should've paid $250.

3 0
3 years ago
Carson Company purchased a depreciable asset for $560,000. The estimated salvage value is $28,000, and the estimated useful life
LenaWriter [7]

Answer:

$79,800

Explanation:

Depreciation expense using the activity method = (actual hours of use in a given period / total estimated hours of use ) × ( Cost of asset - Salvage value)

(1500/10,000) × ($560,000 - $28,000) = $79,800

I hope my answer helps you.

5 0
3 years ago
g Required information [The following information applies to the questions displayed below.] On October 1, Ebony Ernst organized
sweet [91]

Answer:

Please see details below:

Explanation:

Sales  $16.540  

Salaries Expenses  -$7.740

Miscellaneous Expenses -$5.820  

Net Income       $2.980  

Dividends  2.830  

Retained Earnings $150.

Balance Sheets

Assets  

Cash  $8.990  

Accounts Receivable  $16.540  

Equipment  $22.590  

Land  $45.980  

TOTAL ASSETS   $94.100  

Liabilities  

Accounts Payable    $9.170

TOTAL LIABILITIES   9.170  

Equity  

Common Stock   $84.780  

Retained Earnings  $ 150  

TOTAL EQUITY   84.930  

 

6 0
2 years ago
Charles Johnson has to make a deposit in his savings account. He has one $20 bill, two $5 dollar bills, seven $1 bills, six quar
ivolga24 [154]

Answer:

Total deposit is $39

Explanation:

Given

\$20\ bills = 1

\$5\ bills = 2

\$1\ bills = 7

Quarters = 6

Dimes = 5

Required

Determine the total

To do this, we simply multiply each dollar bill or coin with its frequency and add up the results.

i.e.

Total = 1 * \$20 + 2 * \$5 + 7 * \$1  + 6 * Quarters + 5 * Dimes

Total = \$37  + 6 * Quarters + 5 * Dimes

1\ quarter = \$0.25

1\ dime = \$0.1

So:

Total = \$37  + 6 * \$0.25+ 5 * \$0.1

Total = \$37  + \$2

Total = \$39

8 0
3 years ago
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