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Katyanochek1 [597]
3 years ago
8

The annual coupon rate is 2%, but coupons are paid semiannually. The yield to maturity was 1.85%. If the par value is $100,000,

how much did you pay for this bond
Business
1 answer:
erastova [34]3 years ago
7 0

Answer:

Hi the number of years to maturity  for this Bond is missing. I have tried to search for the  full question online but could not find it. However, I will help you get the technique to solve this problem.

The amount of money you pay for the Bond is its Present Value (PV) normally called Current Price of the Bond.

To calculate this, you should have the other remaining elements of the Bond which are : Coupon rate (PMT) , Period of payments within a year (P/YR), Yield To Maturity (YTM), Par Value (Future Value of Bond).

<u>So </u><u><em>assuming</em></u><u> that the Bond in question matures in </u><em><u>5 years</u></em><u> the calculation will be as follows :</u>

Pmt = (1,000,000 × 2%) ÷ 2 = $10,000

Ytm = 1.85 %

Fv = $1,000,000

P/yr = 2

N = 5 × 2 = 10

Pv = ?

You would pay $1,007,132 for this bond

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Answer:

Price elasticity of demand = 2.6

Explanation:

Given:

Old price (P0) = $70

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Computation of Price elasticity of demand(e):

Midpoint method

e=\frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } }

By putting the value:

e=\frac{\frac{10,000-15,000}{\frac{10,000+15,000}{2} } }{\frac{60-70}{\frac{60+70}{2} } }\\e=\frac{\frac{-5,000}{\frac{25,000}{2} } }{\frac{-10}{\frac{130}{2} } }\\

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4 years ago
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Answer:

Carla Vista Company has the following information available for September 2020.

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3 years ago
If The Limited Company relies on hiring a foreign textile manufacturer to produce a
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Answer: Contract manufacturing.

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he director of capital budgeting for See-Saw Inc., manufacturers of playground equipment, is considering a plan to expand produc
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Answer and Explanation:

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= 0.4444

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= 0.5556

As per Dividend discount model

Price = Dividend in 1 year ÷ (cost of equity - growth rate)

40 = $2 ÷ (Cost of equity - 0.06)

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5 0
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Answer:

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