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oksian1 [2.3K]
3 years ago
8

BCtronics Corp. issued 12 year bonds 2 years ago with a coupon rate of 9.2%. The bonds make semiannual payments and have a $1,00

0 par value. If these bonds currently sell for 104% of par value, what is the YTM
Business
1 answer:
dusya [7]3 years ago
4 0

Answer:

8.60%

Explanation:

Face value of the bond = $1000

Years = 10 years (12-2). Semiannual number of periods = 20 (10*2)

Semiannual coupon rate = 9.2%/2 = 0.046

Semiannual coupon payment amount = 0.046*1000 = 46

Present value = 1000*104% = $1040

<em>Value of YTM can be derived using Ms excel </em>

Yield to maturity = YTM (No of periods, Payments, Present value, Face value) * 2

Yield to maturity = YTM (20, 46, 1040, 1000) * 2

Yield to maturity = 4.30% * 2

Yield to maturity = 8.60%

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Which of the following is quite often not incremental? Group of answer choices Direct material Direct labor Variable manufacturi
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4 years ago
You are thinking of building a new machine that will sve you 2,000 in the first year the machine will then begin to wear out so
statuscvo [17]

Answer:

The present value of the savings is $22222.22

Explanation:

A perpetuity is an indefinite series of equal payments made after equal intervals of time and for an unlimited period. A growing perpetuity is a kind of perpetuity whose period payments are not equal and they grow(or decline) at a constant rate each period for an indefinite period of time.

The formula for the present value of a growing perpetuity is attached.

The present value of the savings can be calculated as follows,

Present value = 2000 / (0.05 - (-0.04)

Present value = 2000 / (0.05 + 0.04)

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3 0
3 years ago
If the price of Yoo-hoo is $2 in New York and $1 in St. Petersburg, Russia (after converting the rubles to dollars), you might e
Luba_88 [7]

Answer: A) people to buy Yoo-hoo in St. Petersburg and sell it in New York until the price was the same in each country

Explanation:

As the Yoo-hoo is cheaper in St. Petersberg than in New York, this presents an arbitrage opportunity to buy cheap and sell higher. People will therefore buy from St.Petersberg at the price of $1 and then sell it in New York for $2 thereby making a 100% profit.

Once this happens more and more people will start doing this which would lead to an increase in demand for St. Peterberg Yoo-Hoos. According to the Law of Demand, when demand rises, the price will rise as well so the price in St. Petersberg will keep rising till it gets to the same amount in New York thereby dissuading people from buying to take advantage of the opportunity.

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3 years ago
Benitez Company makes wicker and wooden slat picnic baskets. It requires approximately 1 hour of labor to make one basket of eit
kifflom [539]

Answer:

Assigned cost= $16,080

Explanation:

Giving the following information:

Wicker baskets are produced in batches of 100 units.

Wooden slat baskets are produced in batches of 50.

Setup is required for each batch. During the most recent accounting period, the company made 8,000 wicker baskets and 2,000 wooden slat baskets. Setup costs amounted to $24,000 for the baskets produced during the period.

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Wooden= 2000/50= 40 batches

Proportion of batches= 80/120= 0.67

Assigned cost= 24000*0.67= $16,080

8 0
4 years ago
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