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
Murljashka [212]
2 years ago
5

Sheridan Corp is looking to invest in a three-year bond that makes semi-annual coupon payments at a rate of 5.825 percent. If th

ese bonds have a market price of $985.63, what yield to maturity can she expect to earn?
Business
1 answer:
krek1111 [17]2 years ago
8 0

Answer:

The annual YTM will be = 0.063496 or 6.3496% rounded off to 6.35%

Explanation:

The yield to maturity or YTM is the yield or return that an investor can earn on the bond if the bond is purchased today and is held till the bond matures. The formula to calculate the Yield to maturity of a bond is as follows,

YTM = [ ( C + (F - P / n))  /  (F + P / 2) ]

Where,

  • C is the semi annual coupon payment  in case of semi annual bond
  • F is the Face value of the bond
  • P is the current value of the bond
  • n is the number of semi annual periods to maturity  in case of the semi annual coupon bond

Assuming that the face value of the bond is $1000.

Coupon payment - semi annual= 1000 * 0.05825 * 6/12 = 29.125

Number of semi annual periods = 3 * 2 = 6

YTM - semi annual= [ (29.125 + (1000 - 985.63 / 6))  /  (1000 + 985.63 / 2)

YTM - semi annual= 0.031748 or 3.1748% rounded off to 3.17%

The annual YTM will be = 0.031748 * 2 = 0.063496 or 6.3496% rounded off to 6.35%

You might be interested in
Gwen deposits $5,000 with Home Bank on July 1, 2018. Home Bank promises to repay Gwen the $5,000 plus 1 percent annual interest
Allisa [31]

Answer:

certificate of deposit

Explanation:

A certificate of deposit (CD) is a financial instrument sold by banks

The bank gives this CD to Gwen. She cannot withdraw the cash until July 1, 2023

The certificate of deposit are risk-free investment. The difference with savings account is that a certificate of deposit has a fixed term and fixed interest rate and it is create with the idea of holding the title until maturity. Not doing so, may inccur in penalties so a portion of the interest will be negate.

As this is a financial instrument, the bank issued a title to the investor to recognize his investment.

7 0
3 years ago
Read 2 more answers
Rent collected in advance is: Multiple Choice A shareholders' equity account in the balance sheet. A temporary account, not in t
gulaghasi [49]

Answer:

A liability account in the balance sheet.

Explanation:

When rent is collected in advance, the entries required to be recognized at the point of collection is as follows;

Debit Cash account

Credit Unearned/Deferred rental revenue

The cash account is an asset while the Unearned/Deferred rental revenue is a liability account.

As such, the collection of rent in advance is A liability account in the balance sheet.

3 0
2 years ago
Viet drives around and checks meters to document the amount of electricity used in homes. What Energy pathway is he a part of? E
Aloiza [94]

Answer:

he would be part of the energy distribution process

Explanation:

As Viet drives around and checks meters to document the amount of electricity used in homes since the electricity is distributed off  a power line into the house and then within the house by the wiring to the lights and the electrical outlets for usage by the inhabitants.

6 0
2 years ago
Read 2 more answers
81. After the secondary guaranteed rate expires, some contracts contain a bailout
igor_vitrenko [27]
75% is the best answer
3 0
3 years ago
Market researchers often report discretionary income. Discretionary income is your disposable income minus your fixed expenses.
SOVA2 [1]

The percentage of the disposable income that is discretionary is equal to 30.82% if the amount left after fixed expenses is $900.

As the amount left after payment of the fixed expenses is $900, this is said to be the discretionary income because discretionary income is equal to the disposable income minus fixed expenses.

Now we can calculate the percentage of disposable income that is discretionary as follows;

percentage of disposable income that is discretionary = (discretionary income ÷ disposable income) × 100

% discretionary income = (900 ÷ 2,920) × 100

% discretionary income = 90,000 ÷ 2,920

% discretionary income = 30.82%

Hence, 30.82% of the disposable income is calculated to be discretionary if the disposable income is $2,920 and the amount left after payment of fixed expenses is $900.

To learn more about discretionary income, click here:

brainly.com/question/15814704

#SPJ4

3 0
1 year ago
Other questions:
  • A firm recently issued $1,000 par value, 20-year bonds with a coupon rate of 6% and semi-annual payments. The bonds sold at par
    7·1 answer
  • The number of employees in a company is reduced in the ratio 3 : 2 and the salary of each employee is increased in the ratio 4 :
    8·1 answer
  • Exercise 13-8 Payback Period and Simple Rate of Return [LO13-1, LO13-6]
    13·1 answer
  • من الامثلة على الازمات المادية الملموسة في المنظمات​
    6·1 answer
  • 15. A market decline of 23% on a day when there is no significant macroeconomic event ______ consistent with the EMH because ___
    8·1 answer
  • Greater pricing power is most likely to result from greater:A. unused capacity.B. market concentration.C. volatility in market s
    9·1 answer
  • Residents of Mill River have fond memories of ice skating at a local park. An artist has captured the experience in a drawing an
    15·1 answer
  • Compare the company profit performance and financial position with the average for the industry
    15·1 answer
  • Cara writes an e-check on Monday to pay a bill in the simulation. What is the earliest it will be applied to the vendor account?
    10·1 answer
  • indicators that the local currency is also the functional currency include all of the following except:
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!