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Stells [14]
2 years ago
5

Umbarra Company bonds have a stated coupon rate of 5% and pay interest on an annual basis. They mature in 18 years and have a pa

r value of $1,000. The market rate of interest on similar debt is 8%. The value of Umbarra bonds is (round to the nearest dollar).
Business
1 answer:
Kay [80]2 years ago
8 0

Answer:

Value of Bond =$718.8

Explanation:

The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate  

Value of Bond = PV of interest + PV of RV

The PV of interest payment

A ×(1- (1+r)^(-n))/r

Interest payment = 5%× 1000 = 50

PV = 50× (1- 1.08^(-18))/0.08 = 468.59

PV of redemption value  

PV = RV× (1+r)^(-n)

PV = 1000× 1.18^(-18) = 250.24

The value of bond = 468.59 + 250.24= 718.84

The value of Bond = $718.84

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The price of greatness is responsibility meaning
GarryVolchara [31]

The phrase “the price of greatness is responsibility” means that, if you are given or rewarded with great or high powers, you must be a responsible person in using that certain power. You are given the responsibility to use it for the well-being of yourself and for the others as well.

8 0
3 years ago
Which type of financial institution is owned by its depositors and borrowers?
fredd [130]
"credit unions" are owned by the people who deposit and are loaned money
3 0
3 years ago
It has been a great year at Capital Funding, Inc., an SEC-registered broker-dealer that is also registered in 22 states. The com
sergey [27]

Answer:

Option D would be the appropriate alternative.

Explanation:

  • A broker dealer would be a company or organization engaged throughout the purchase as well as the sale of securities within its multiple occasions or even on behalf of the participants.
  • Brokerage serves as an intermediary whenever it implements order information on behalf of the shareholders while acting mostly as a dealer or superintendent whenever it exchanges on one's consideration.

Other choices available aren't connected to that same scenario in the statement. So the answer here is just the perfect one.

3 0
2 years ago
The Donaldson Furniture Company produces three types of rocking​ chairs: the​ children's model, the standard​ model, and the exe
lions [1.4K]

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

We assume that

X = No. of children

Y  = Standard type

Z = Executive type

So,

5x + 4y + 7z = 185.........(1)

3x + 2y + 5z = 115.........(2)

2x + 2y + 4z = 94

x + y + 2z = 47.........(3)

Equation (2) multiply by 2

6x + 4y + 10z = 230

From equation (1) to (2)

5x + 4y + 7z = 185

6x + 4y + 10z = 230

-x + 0 - 3z = -45

x + 3z = 45.......(4)

Equation (3) multiply by 4

4x + 4y + 8z = 188

From equation (1) to (3)

5x + 4y + 7z = 185

4x + 4y + 8z = 188

x + 0 - z = -3

- x + z = 3……(5)

From equation (5) to (4)

x + 3z = 45

-x + z = 3

4z = 48

Executive type = Z = 48 ÷ 4 = 12

Z = 12 in equation (5)

-x + 12 = 3

x = 9 (children type)

x=9, z=12 in equation 1

5x + 4y + 7z = 185

5 × 9 + 4 × y + 7 × 12=185

45 + 4 × y + 84 = 185

4y = 56 ÷ 4

Y= 14(Standard type)

8 0
2 years ago
Woodwick Company issues 9%, five-year bonds, on December 31, 2014, with a par value of $96,000 and semi-annual interest payments
ad-work [718]

Answer:

A) The issuance of bonds on December 31, 2016.

Dr Cash 104,031

    Cr Bonds payable 96,000

    Cr Premium on bonds payable 8,031

B) The first interest payment on June 30, 2017.

Dr Interest expense 3,517

Dr Premium on bonds payable 803

    Cr Cash 4,320

C) The second interest payment on December 31, 2017.

Dr Interest expense 3,517

Dr Premium on bonds payable 803

    Cr Cash 4,320

4 0
3 years ago
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