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Reil [10]
2 years ago
13

You have the following information regarding a bond that pays semi-annual coupon payments: Time to maturity is 12 years Coupon R

ate is 6% The current price (PV) of the bond is $1,189.14 today. Compute the I/T Periodic rate on the bond that is required by the market. State as a percent without using the percent sign and round to the second decimal place. Hence, 23.628% would be written as 23.63 for the response to be correct.
Business
1 answer:
IrinaK [193]2 years ago
7 0

Answer: 2%

Explanation:

As the coupon payments are semi-annual, you need to convert the other measures to semi-annual measures as well.

Coupon rate = 6%/2 = 3% per semi annum

Coupon payment = 3% * 1,000 which is par value = $30

Time to maturity = 12 * 2 = 24 semi annual periods

Price is still the same = $1,189.14

You can use an Excel worksheet to solve for the Yield:

Number of periods = 24

Payment = $30

PV = 1,189.14

FV is par value of $1,000

Periodic rate is 0.019999

= 2%

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How do investment banks differ from commercial? banks? ?(mark all that? apply.)?
jenyasd209 [6]
Investment banks help companies to purchase, sell and make investments using bonds while commercial banks are concerned on managing deposits on both savings and checking account.

Investment banks aid companies on bringing their investments on public offers; commercial banks are focused on providing security for the clienteles money.

Investment banks have some degree of freedom in choosing their own strategies while commercial banks have more risks because they are open to public transactions. 
4 0
3 years ago
Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets
alekssr [168]

Answer:

$7.15

Explanation:

Calculation for Other The cost of wages and salaries and other overhead that would be charged to each bouquet made is:

Wages and salaries charged to each bouquet produced = (60%*$180,000)+(50%*$70,000)/20,000 bouquet

Wages and salaries charged to each bouquet produced = $108,000+$35,000/20,000 bouquet

Wages and salaries charged to each bouquet produced = $143,000/20,000 bouquet

Wages and salaries charged to each bouquet produced = $7.15

Therefore The cost of wages and salaries and other overhead that would be charged to each bouquet made is:$7.15

7 0
3 years ago
Tamarisk, Inc. has 12000 shares of 5%, $100 par value, non-cumulative preferred stock and 48000 shares of $1 par value common st
hjlf

Answer:

$84,000

Explanation:

preference share dividend is at 5% on $100 par value. The  number of preference shares is 12,000 shares ( non cumulative)

The year 2017 preference share dividend pay out is 5% of 100 multiplied by 12,000 = $60,000

Deduct $ 60,000 from $144,000 dividend declared in 2017 , the balance is common stockholders dividend.

144,000 minus 60,000 = $84,000

Non cumulative preference shares dividend are paid first for the year the company declares dividend. The dividend is not cumulative ( prior years dividend for which company did not declare dividend are forfeited).

The common stockholders are paid dividend after preference shares dividend are paid. The common stockholders bears the full risk of the business as seen above. In event of liquidation, they are the last to be settled from realised asset of the bankrupt company.

7 0
3 years ago
13. Assume that Cane’s customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the raw
timurjin [86]

Answer:

80000 unit of Alpha

Explanation:

This is a Limiting factor/resource constraint question. In certain situations entities suffer from shortage of necessary resources (e.g: shortage of material, labor hours, machine hours), in such circumstances entities strive to allocate the constraint resources to the production of those products which generate the highest contribution per limiting factor and help maximize total contribution. In this case the limiting factor for Cane is Raw material.

Lets suppose that each unit of <em>Alpha and Beta sell for $120 and $80</em> respectively and variable cost per unit of <em>Alpha and Beta is $69 and $20 </em>respectively. Each unit of <em>Alpha and Beta require 2 and 5 pounds</em> of raw material for production respectively.

Now that we have supposed the data we have to compute contribution per unit and then contribution per limiting factor and based on the ranking (i.e highest first) of contribution per limiting factor we decide which product should be given priority for resource allocation.

<em>Lets calculate contribution per unit.</em>

Alpha:

Contribution per unit= SP-VC

Where, SP stands for selling price and VC stands for variable cost.

CPU= 120-69

CPU=$51

Beta:

Contribution per unit= 80-40

CPU=$40

<em />

<em />

<em>Now, lets calculate contribution per limiting factor.</em>

Alpha:

CLF: $51÷2

CLF: $25.5        1st Rank

Beta:

CLF: $40÷5

CLF: $8              2nd Rank

So clearly Alpha has a greater contribution per limiting factor and it implies that Alpha will earn the highest contribution margin therefore Cane should produce and allocate resources to Alpha first and then Beta if there remains any?

Profit maximizing output:

It requires 2 pounds of raw material to produce one unit of Alpha (i.e 80000×2=160000) Therefore Cane should produce 80000 units of Alpha only in order to maximize its profits.

3 0
3 years ago
Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when
swat32

Answer:

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that the average total cost when 5 units of output are produced is $60, and the marginal cost of the sixth unit of output is $120. What is the average total cost when six units are produced

4 0
2 years ago
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