Rokhanna, Inc. issued $1,000 par value bonds with an 8% coupon. The bonds have 18 years to maturity. Market interest rates are 5
1 answer:
Answer:
Bond Price = $1294.65063 rounded off to $1294.65
Explanation:
To calculate the price of the bond today, we will use the formula for the price of the bond. Assuming the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,
Coupon Payment (C) = 1000 * 0.08 = 80
Total periods (n) = 18
r or YTM = 0.054 or 5.4%
The formula to calculate the price of the bonds today is attached.
Bond Price = 80 * [( 1 - (1+0.054)^-18) / 0.054] + 1000 / (1+0.054)^18
Bond Price = $1294.65063 rounded off to $1294.65
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Answer:
interest rate is 2.25 %
Explanation:
given data
sell bond = $715
bond matures = 15 years
redeem = $1,000
solution
we apply here formula that is
amount = principal × ................1
here put value and we get
1000 = 715 × (1+r)^{15}
=
solve it we get
r = 0.022617
so rate is 2.25 %
Answer:
Explanation:
Sales Price: 434,000 / 21,700 = 20
Variable cost: 65,100 / 21,700 = 3
fixed cost: 142,000
Values at 27,400 units:
sales: 27,400 units x $20 = 548,000
variable cost: 27,400 units x $3 = 82,200
Now, we compare with the actual result and calcualte the income