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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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4 0
3 years ago
_____ is a rater error in which a rater gives high ratings to all employees regardless of their performance.
Ilya [14]

Answer:

Leniency

Explanation:

Leniency is a rater error in which a rater gives high ratings to all employees regardless of their performance.

Leniency error is when a rater has the tendency to rate all employees at positively, this is positive leniency and occurs at the top of the rating scale or at the low end of the scale negative leniency. Leniency error happens when a manager emphasizes too much on positive or negative behaviors

5 0
3 years ago
Why are manufactured goods more valuable to the economy than services (select all that apply)
ahrayia [7]
The answer is no 2 and 4
5 0
2 years ago
1. What is bartering?
Vinil7 [7]

Answer:

It means exchange for good or service without using any money

4 0
3 years ago
Read 2 more answers
What are 3 examples of things that may be built with Municipal bonds?
Troyanec [42]

Answer:

hospitals, highways, schools

Explanation:

A municipal bond is a type of debt security made by government entities in order to finance <em>capex </em>(capital expenditures), mainly for the construction of hospitals, highways, schools.

They represent loans that investors give to such government entities and they are usually exempt from the usual taxes on building such things.

7 0
2 years ago
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