1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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%

You might be interested in
The City of Fargo issued general obligation bonds to finance construction of a new fire station. The bonds were issued at a prem
Dmitry_Shevchenko [17]

Answer:

The correct answer is (c)

Explanation:

Bonds and stocks are used to generate financing. The city of Fargo has issued bonds to finance the construction of a new fire station. The bond is a type of debt funding and the premium must be transferred to a debt service fund. A debt service fund will be used to pay out the principal payments on those bonds.

5 0
3 years ago
Decreased interest rates will shift the aggregate demand curve to the _____ and _____ output demanded.
Virty [35]

The aggregate demand curve often shifts to the components of aggregate demand. The Decreased interest rates will shift the aggregate demand curve to the right and increased output demanded.

  • The component that is often shifted are consumption spending, investment spending.

In expansionary monetary policy the central bank often makes the supply of money and loanable funds to increase, this in turn will lowers the interest rate, promoting additional borrowing for investment and consumption, and there shifting aggregate demand right.

The rate of government spending, and often rise.

An aggregate demand curve is known to show the total spending on domestic goods and services at each price level.

Learn more from

brainly.com/question/16876969

7 0
3 years ago
Read 2 more answers
Critically review the organizational structure recommendations reported within the In-Plant Printer article titled, "Organizing
marin [14]

Answer:

Explanation: see attachment below

4 0
4 years ago
Vaughn Manufacturing has fixed costs of $30000 per year. Its warehouse sells wine with variable costs of 90% of its unit selling
oksian1 [2.3K]

Answer:

$300,000

Explanation:

Calculation for How much in sales does Vaughn need to break even per year

Using this formula

Sales needed to break even=Fixed cost/(1-Unit selling price Variable costs)

Let plug in the formula

Sales needed to break even=$30,000 / (1 -.9)

Sales needed to break even=$30,000 / (0.1)

Sales needed to break even=$300,000

Therefore How much in sales does Vaughn need to break even per year will be $300,000

8 0
3 years ago
On October 1, 2018, Perry Corporation signed a 12-month, 8% interest-bearing promissory note for $10,000. Assume that all approp
asambeis [7]

Answer:

$600

Explanation:

The reason is that the recognition of the interest expense is split between two accounting periods. In the first accounting period the interest expense recognized will be for 3 months as the period from inception (October 1, 2018) to the end of year (December 31, 2018) is 3 months.

This means that:

Interest Expense = $10,000 * 8% * 3/12 = $200

So this will be recognized in the first accounting period ending at December 31, 2018. The interest expense of 9 months falls in the secong accounting period, which means the interest expense for the second accounting period will be:

Interest Expense = $10,000 * 8% * 9/12 = $600

6 0
4 years ago
Other questions:
  • Brainliest Answer!! What Type of competitive situation is this?
    5·1 answer
  • On July 15, 2021, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient-weighing system for a price o
    12·1 answer
  • What is a production possibility curve
    9·1 answer
  • I want to know about basic procurement principles
    8·1 answer
  • David Company uses the gross method to record sales made on credit. On June 10, 2017, it sold goods worth $250,000 with terms 2/
    7·1 answer
  • If estimated annual factory overhead is $546,000; overhead is applied using direct labor hours; estimated annual direct labor ho
    5·1 answer
  • Hong Co. had net income of $392,100 under variable costing. Beginning and ending inventories were 3,200 units and 4,500 units, r
    13·1 answer
  • Where do teenagers get all the money they need to make purchases? I noticed several new stores had opened up at the local mall.
    11·2 answers
  • Answer these you get 20 points!!! Please help me !! Please
    10·1 answer
  • If you borrow $1500 with a compounding interest rate of 8% for 2 years, that compounds semi-annually. How much will you pay back
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!