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Anarel [89]
3 years ago
12

American Industries' outstanding bonds have a 25-year maturity and $1,000 par value. Their nominal yield to maturity is 9.25%, t

hey pay interest semiannually, and they sell at a price of $850. What is the bond's nominal coupon interest rate
Business
1 answer:
mezya [45]3 years ago
7 0

Answer:

7.71%

Explanation:

Calculation to determine the bond's nominal coupon interest rate

First step is to determine the PMT using Financial calculator

FV = $1,000

N= 25 × 2 = 50 periods ( semi-annual)

i/y=9.25/2=4.63

PV= - 850

PMT=?

Hence,

PMT=38.55

Second step is to calculate the Annual coupon Payment

Annual coupon Payment =38.55x2

Annual coupon Payement= 77.10

Now let determine the bond's nominal coupon interest rate using this formula

Nominal coupon rate= Annual coupon payment/par value

Let plug in the formula

Nominal coupon rate=77.10/1000

Nominal coupon rate=7.71%

Therefore the bond's nominal coupon interest rate is 7.71%

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disa [49]

Answer:

$14.50

Explanation:

Given;

Charge for first 2 hours = $5.00 and

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Therefore cost to Sam for parking his car for 8 hours

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3 years ago
The value of what a Canadian-owned Tim Hortons produces in South Korea is included in the Canadian ________ and the South Korean
Illusion [34]

Answer: GNP; GDP

Explanation:

<em>The value of what a Canadian-owned Tim Hortons produces in South Korea is included in the Canadian </em><em><u>GNP </u></em><em>and the South Korean </em><em><u>GDP</u></em><em>. </em>

Gross National Product refers to the total amount of domestic production and foreign production that can be attributed to the residents of a nation.

This means that GNP includes the GDP and income earned by residents of the country in other countries but less the income earned by foreigners in the country. For Canada therefore, the value of goods produced by the Canadian company in South Korea will be added to the GNP.

Gross Domestic Product (GDP) on the other hand is simply the total final value of goods and services produced in a country regardless of if it was foreigners or residents doing the production. The value of what a Canadian-owned Tim Hortons produces in South Korea is therefore included in South Korea's GDP.

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Answer:

Limited natural resources such as infertile land and lack of coastal access can limit economic growth for a country.

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Natural resources are a source of wealth for the country.  Mineral such oil and precious stones have made nations wealthy.

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