1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Effectus [21]
3 years ago
10

Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 8%. Now, with 7 years

left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 12%. What is the price of the bond now
Business
1 answer:
maxonik [38]3 years ago
3 0

Answer:

$814.10

Explanation:

Calculation to determine what the price of the bond now

Using this formula

Bond price = PV of coupon payments + PV of face value

Bond price= C×((1 / r) – {1 / [r(1 + r)t]}) + FV / (1 + r)t

Let plug in the formula

Bond price= [(.080 ×$1,000) / 2] ×[[1 / (.12 / 2)] – (1 / {(.12 / 2)[1 + (.12 / 2)](7 ×2)})] + $1,000 / [1 + (.12 / 2)](7 ×2)

Bond price= $814.10

Therefore the price of the bond now is $814.10

You might be interested in
Supply costs at Lattea Corporation's chain of gyms are listed below: Client-Visits Supply Cost March 11,665 $28,579 April 11,461
mario62 [17]

Answer:

<em>$0.48 per client-visit; $22,856 per month</em>

Explanation:

Where,

y2 is the total cost at highest level of activity;                                                                       y1 is the total cost at lowest level of activity;                                                                      x2 are the number of units/labor hours etc. at highest level of activity; and                           x1 are the number of units/labor hours etc. at lowest level of activity

<em>Variable Cost per Unit </em>

= (28,904 -28,227) / (12,600-11,199)

= $0.48

<em> Total Fixed Cost </em>

= y2 ? bx2

= 28,904 - $0.48 * 12600

= $22,856.00

3 0
3 years ago
Read 2 more answers
As a real estate speculator, you are planning and able to buy a house that costs $200,000, borrowing the full amount with no mon
Ivanshal [37]

Answer: $4,000

Explanation:

The house is worth $200,000 in the present when you bought it.

When you sell it in a year, it would have appreciated by 2% over the capital that you invested as per the expected increase in Real Estate rates.

Your capital gain therefore is that 2%;

= 2% * 200,000

= $4,000

7 0
3 years ago
Financial accounting is the process of identifying, measuring, and communicating financial information about an economic entity
Anna007 [38]

Answer:

The correct answer is "financial information; economic entity; user groups; legal, economic political and social environment"

Explanation:

The four major elements of financial accounting​ are:

1. financial information: includes items such as management discussion, analysis, and reports.

2. economic entity: An economic entity is company actions that are separate from its owners and other entities, such as corporations and governmental​ organizations.

3. user groups: request business information of an economic entity.  Investors and financial​ analysts are user groups.

4. legal, economic political and social environment: influences the financial reporting process.

7 0
3 years ago
You just sold 900 shares of Alcove stock at a price of $34.08 a share. Last year you paid $39.20 a share to buy this stock. You
ehidna [41]

Answer:

d. -$4,608

Explanation:

The computation of the total capital gain is shown below:

Total capital gains is

= (End value - Beginning value) × 900 shares

= ($34.08 - $39.20) × 900 shares

= -$4,608

Hence, the  total capital gain on this investment is -$4,608

Therefore the option d is correct

And, the same is to be relevant

5 0
3 years ago
Tomato sauce and spaghetti noodles are complementary goods. A decrease in the price of tomatoes will a. decrease consumer surplu
Hunter-Best [27]

Answer: c. increase consumer surplus in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles.

Explanation:

A complementary good is the one which can be used only with another good. For example a CD can only run in a CD player or any other suitable device so the sales of CD is dependent upon the availability of device used to pay it. Other examples are tennis ball and tennis racket, mobile phone and sim cards, and others.

According to the given situation the decrease in price of tomato will be an advantage to the consumers as they will be able to purchase them with an affordable price and can produce tomato sauce this will promote the production of spaghetti noodles as tomato sauce is consumed along with spaghetti noodles this way the tomato sauce and spaghetti noodles are complementary goods for each other. The sales and production of one good will affect the sales and production of another.

6 0
3 years ago
Other questions:
  • How much money would you have to invest today, at an interest rate of 5% in order to reach your goal of $1,000,000 in 30 years?
    6·1 answer
  • Nathan owns a quick-lube oil service station. He wants to understand whether his customers are sensitive to price and if he shou
    8·1 answer
  • Describe Classical Theory. To do so, begin by describing its approach to the circular flow model and indicate its assumption abo
    6·1 answer
  • In March, stockholders of Herbalife Nutrition approved a 3-for-2 stock split. After the split, how many shares of Herbalife stoc
    10·1 answer
  • Please Help!!!
    8·1 answer
  • Evidence indicates that the best promotional strategy for firms operating globally is:
    5·1 answer
  • If getting a college degree is not possible, which of the following would be next best option for starting a career in fashion d
    12·2 answers
  • Consider the following: Cash in Bank - checking account of $18, 500 Cash on hand of $500. Post dated checks received totaling $3
    14·1 answer
  • Which of these are mathematical laws that help us solve numerical problems? O A decimals O B. graphs O C. formulas OD. percentag
    6·1 answer
  • Andy has been asked to report at a war zone to serve as an officer in the army. Which of the following statements is true in the
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!