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Savatey [412]
3 years ago
12

Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are trading at well below par value.

He has his eye on a bond issued by the Leisure Time Corporation. The $1,000 par value bond pays 6 percent annual interest and has 15 years remaining to maturity. The current yield to maturity on similar bonds is 11 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. What is the current price of the bonds?
b. By what percent will the price of the bonds increase between now and maturity? (Round "PV Factor" to 3 decimal places, intermediate and final answers to 2 decimal places. Omit the "%" sign in your response.) Price increases by %
Business
1 answer:
igomit [66]3 years ago
3 0

Answer:

Future value = FV = 1000

Annual interest = i = 0.06

Yield to maturity = y = 0.15

Number of years = N = 15

Annuity Value = A = 60

PV_IFA = 5.847

PV_IF = 0.1229

1. PV of interest = A*PV_IFA   =  350.82

PV of principal = FV * PV_IF = <u>122.9</u>

Bond Price =                             <u>$473.72</u>

<u />

2. Percent increase at maturity

Maturity Value      $1,000.00

Current price        $<u>473.72</u>

Dollar increase     <u>$526.28</u>

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Cold Creek Kayaks, a manufacturing company, has beginning finished goods inventory of $25,000; cost of goods manufactured of $32
Lelu [443]

Answer:

The cost of goods available for sale is $345,000

Explanation:

Beginning finished goods inventory   $25,000

Cost of Goods manufactured           $320,000

Cost of Goods available for sale,

             =  Beginning finished goods inventory + Cost of Goods manufactured

             = $25,000 + $320,000

            = $345,000

6 0
3 years ago
Where do you think the biggest hole is in the registration statement?
Alex17521 [72]
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quester [9]

Any value given up from not going to the movies is the <u>"opportunity cost".</u>


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4 0
3 years ago
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Shantel has a checking account balance of $318.59. She wrote a check to United farmers Market for $52.17. What is Shantel's new
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Answer:

$266.42

Explanation:

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6 0
3 years ago
The following information relates to last year's operations at the Legumes Division of Gervani Corporation: Minimum required rat
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Answer: $45000

Explanation:

Firstly, the operating asset will be calculated which will be:

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