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snow_tiger [21]
3 years ago
15

Suppose we have a bond issue currently outstanding that has 20 years left to maturity. The coupon rate is 8% And coupons are pai

d semiannually. The bond is currently selling for $828 per $1,000 bond. What is the cost of debt?
a. 8%
b. 9%
c. 10%
d. 11%
e. 12%
Business
1 answer:
cluponka [151]3 years ago
3 0

Answer:

c. 10%

Explanation:

The Yield to Maturity(YTM) of the Bond is the cost of the debt. So, we need to find the YTM first.

Here i will use a Financial Calculator to enter and compute the YTM as follows :

N = 20× 2 = 40

PMT = ($1,000 × 8%) ÷ 2 = $40

PV = $828

P/YR = 2

FV = 1,000

I or YTM = ?

Thus the cost of the Bond is 10%

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Lunna [17]

Answer:

b. a close corporation. 

Explanation:

A closed corporation is a corporation in which the shares of the company aren't publicly traded. Shares are held by few people, they are usually family members or mangers of the business. A closed corporation is taxed like a typical corporation and has limited liabilities.

A s corporation is a type of corporation where shares are held by few people. S corporations are taxed like a partnership- they are taxed once.

A non profit corporation is set up for purposes other than to make profit.

I hope my answer helps you

6 0
3 years ago
Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data
Oliga [24]

Answer:

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Explanation:

Total units sold = 14000 + 56000

                          = 70000

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                      = 0.20  

weight of bins = 1 -0.20

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weighted average contribution = (40 *0.20 ) + (20 *0.80 )  

                                                    = 8+ 16  

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Break Even Point (Units) = Fixed cost /weighted average contribution

                   = 960,000 / 24  

                   = 40000 units

Therefore, Carter Co.'s break-even point in units was 40000 units.

3 0
4 years ago
Explain the accrual basis of accounting and reasons for adusting entries​
Finger [1]
The accrual basis of accounting states that “expenses are matched with related revenues and are reported when the expense is incurred, not when cash changes hand”. Therefore, adjusting entries are required because of the matching principle in accounting.

8 0
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6 0
3 years ago
The following T-account is a summary of the Cash account of Cuellar Company.
Basile [38]

Answer:

D

Explanation:

6 0
3 years ago
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