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cluponka [151]
3 years ago
13

has issued bonds that have a 8% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and

a yield to maturity of 5%. What is the price of the bonds
Business
1 answer:
snow_tiger [21]3 years ago
3 0

Answer:

Bond Price​= $1,195.82

Explanation:

Giving the following information:

Face value= $1,000

YTM= 0.05/2= 0.025

Years tomaturity= 8*2= 16 semesters

Coupon= (0.08/2)*1,000= $40

<u>To calculate the price of the bond, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 40*{[1 - (1.025^-16)] / 0.025} + [1,000/(1.025^16)]

Bond Price​= 522.2 + 673.62

Bond Price​= $1,195.82

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Answer: D. Tim’s income level increases the more he works.

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Tim's income for the year = Salary from working + Welfare

Lets say Tim works <u>200 hours</u> in a year.

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70 cents off for every $1 so the amount they will deduct from Welfare is:

= 0.7 * 1,600

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They will deduct this amount from the welfare of $15,000 and give Tim the rest.

Total income = 1,600 + (15,000 - 1,120)

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Salary is:

= 500 * 8

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Amount to be deducted for welfare:

= 0.7 * 4,000

= $2,800

Total income:

= 4,000 + (15,000 - 4,000)

= $16,200

Notice how the income goes up as Tim works more. This policy therefore provides a monetary incentive to work harder.

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An organization with customer-focused design with the inverted organization structure puts the empowered front-line workers at t
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Answer:

tellers at JP Morgan Chase branches.

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Lucas Laboratories' last dividend was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a co
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Answer:

Expected dividend yield = 10.0%

Expected capital gains yield =  5.0%

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