Ask question

Ask question

All categories

3 years ago

15

Myriad Solutions, Inc. issued 12% bonds, dated January 1, with a face amount of $350 million on January 1, 2021, for $312,921,21

0. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity the market yield is 14%. Interest is paid semiannually on June 30 and December 31. 1. What would be the net amount of the liability Myriad would report in its balance sheet at December 31, 2021

1 answer:

sammy [17]3 years ago

6 0

Answer:

Myriad Solutions, Inc.

The net amount of the liability that Myriad would report in its balance sheet at December 31, 2021 is:

= $314,793,494

Explanation:

a) Data and Calculations:

Face value of bonds = $350 million

Discounted value (Cash receipt) = $312,921,210

Total amount of discount = $37,078,790

Bond's interest rate = 12%

Market yield = 14%

June 30, 2021:

Cash payment for interest = $21 million ($350 m * 6%)

Bonds' Interest expense = $21,904,485 ($312,921,210 * 7%)

Amortization of bond discount = $904,485 ($21,904,485 - $21 million)

Bond book value = $313,825,695 ($312,921,210 + $904,485)

Dec. 31, 2021:

Cash payment for interest = $21 million ($350 m * 6%)

Bonds' Interest expense = $21,967,799 ($313,825,695 * 7%)

Amortization of bond discount = $967,799 ( $21,967,799 - $21 million)

Bond book value = $314,793,494 ($313,825,695 + $967,799)

You might be interested in

Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of return is 7%. Use

konstantin123 [22]

Answer:

$1,900.35

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.

The npv can be calculated using a financial calculator:

Cash flow in year 0 = -$32,400

Cash flow in year 1 = $9720

Cash flow in year 2 = $9720

Cash flow in year 3 = $9720

Cash flow in year 4 = $ 4,860

Cash flow in year 5 = $ 4,860

Cash flow in year 6 = $2,430

I =7%

NPV = $1,900.35

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

3 0

3 years ago

Mr. Hugh Warner is a very cautious businessman. His supplier offers trade credit terms of 3/19, net 60. Mr. Warner never takes t

vekshin1

Answer:

35.92%

Explanation:

The computation of cost of not taking the cash discount is shown below:-

Discount percentage ÷ (100 - Discount percentage) × (360 ÷ (Full Allowed Payment Days - Discount Days))

= 3% ÷ 97% × 360 ÷ (50 - 19)

= 3% ÷ 97% × 360 ÷ 31

= 0.03093 × 11.61290

= 0.359187

= 35.92%

Therefore for computing Mr. Warner's cost of not taking the cash discount we applied the above formula.

3 0

3 years ago

if dan's baseball card collection is stolen after he entered in to an agreement to sell the cards, the contract must be because

Pie

If dan's baseball card collection is stolen after he entered into an agreement to sell the cards, the contract must be discharged, because of the impossibility of performance.

What is the agreement?

A contract between two or more people to do something is referred to as an agreement. Two or more parties must agree to the terms of the agreement in order to create a legally binding commitment.

The baseball card collection entered into an agreement to sell the cards, the contract must be discharged, and the performance is impossible. The credit card was taken. This is the primary reason for the performance's impossibility.

As a result, the agreement of the discharge of the contract.

Learn more about the agreement, here:

brainly.com/question/24225827

#SPJ4

5 0

1 year ago

Which of the following are the two most important sources of contract law?

nadezda [96]

Answer:

The correct answer is B

Explanation:

Contract Law is the law or an agreement among the private parties establishing the mutual obligations which is enforceable by law. The basic or primary elements are required for the agreement or contract to be legally enforceable agreement are expressed by a acceptance and valid offer, legality, mutual assent and adequate consideration.

The two most vital sources of the contact law are Statutory Law (The Uniform Commercial Code) and the Case law.

6 0

3 years ago

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annua

max2010maxim [7]

Answer:

Market Price $985.01

Explanation:

We have to convert the US semiannually rate to annually.

$(1 + 0.078/2)^{2} -1 = 0.079521$

Now this is the annual rate spected for a similar US Bonds

So we are going to calculate the present value using this rate.

Present value of an annuity of 78 for 20 years at 7.9521%

$C * \frac{1-(1+r)^{-time} }{rate} = PV\\$

$78 * \frac{1-(1+0.079521)^{-20} }{0.079521} = PV\\$

PV = 768.55

And we need to add the present value ofthe 1,000 euros at this rate

$\frac{Principal}{(1 + rate)^{time} = Present Value}$

$\frac{1,000}{(1 + 0.079521)^{20} = Present Value }$

Present Value = 216.4602211

Adding those two values together

$985.01

The reasoning behind this is that an american investor will prefer at equal price an US bonds because it compounds interest twice a year over the German Bonds.

6 0

3 years ago