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Vikki [24]
3 years ago
7

Leahy Corp. sells $300,000 of bonds to private investors. The bonds are due in five years, have a 6% coupon rate, and interest i

s paid semiannually. The bonds were sold to yield 4%. Group of answer choices The bonds were sold at a discount, with annual interest expenses more than $18,000 The bonds were sold at a discount, with annual interest expenses less than $18,000 The bonds were sold at a premium, with annual interest expenses more than $18,000 The bonds were sold at a premium, with annual interest expenses less than $18,000 The bonds were sold at par, with annual interest expenses equal to $18,000
Business
1 answer:
Black_prince [1.1K]3 years ago
3 0

Answer:

The bonds were sold at a premium, with annual interest expenses less than $18,000

Explanation:

r = 4% per annum = 4%*6/12 = 2%

n = 5 years * 2 = 10

Present value of annuity factor = [1 - (1+r)^(-n)] / r

Present value of annuity = [1 - (1.02)^(-10)] / 0.02

Present value of annuity = 8.982585

Interest payment = $300,000*6%*6/12

Interest payment = $9,000

Present value factor = 1/(1+r)^n

Present value factor = 1 / (1.02)^10

Present value factor = 0.8203483

Face value = $300,000

Selling value of bond = [8.982585*9000] + [0.8203483*300,000]

Selling value of = 80,843.265 + 246,104.49

Selling value of = 326,948. (Amount that bond are sold for is greater than 300,000 i.e at a premium).

Coupon rate payment = $300,000*6%

Coupon rate payment = $18,000

You might be interested in
Mr Coffey bought a house for 195,000 he made a 20% down payment the interest rate is 5.25% for 30 years
Jobisdone [24]

$39000

DOWN PAYMENT MEANS THE AMOUNT YOU PAY PAY AT THE TIME OF THE DEAL OF PURCHASING THE HOUSE.THERE IS USUALLY A PERCENTAGE OF THE TOTAL AMOUNT AND IS PAID IN A LUMP SUM.

20& OF THE COST OF HOUSE OUT HERE

I.E. 20% OF $195000

= 0.2 * 195000

=$39000

6 0
3 years ago
Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $540,000, and factory payro
vovangra [49]

Answer:

See below

Explanation:

Marcelino Co's total cost of each production incurred in April

From March

Job306 Job307 job308

Direct materials $28,000 $39,000

Direct labor $23,000 $17,000

Applied overhead $11,500 $8,500

(50% of direct labor)

Beginning goods in process $52,500 $64,500 ---

For April:

Direct materials $139,000 $220,000 $110,000

Direct labor $103,000 $153,000 $104,000

Applied overhead $51,500 $76,500 $52,000

(50% of direct labor)

Total cost added in April $293,500 $449,500 $266,000

Total costs(April 30) $346,000

$514,000 $266,000

3 0
3 years ago
module 3 BlockWood Inc. has been providing raw materials to Couches Corp., a furniture company. The management at Couches recent
maria [59]

The correct answer to this open question is the following.

You forgot to include the options for this question. However, we can answer the following.

This scenario best illustrates forward integration.

This is a case of forward integration because BlockWood Inc., which was facing similar difficulties with other buyers too, eventually stopped supplying raw materials and took to manufacturing furniture instead. SO they decided to fabricate their own furniture.

Companies make this decision as a process of vertical integration to expand and grow their business. In this case to produce and control their own products, eliminating the retailer that had decided to pay less money for the raw materials.

So now, Blockwood Inc. has the challenge to design and sell the products it is fabricating.

6 0
3 years ago
Greenwood Motels has filed a petition for bankruptcy but hopes to continue its operations both during and after the bankruptcy p
xxMikexx [17]

Answer:

The correct answer is letter "E": Reorganization.

Explanation:

A company reorganization takes place in front of the need for changing operating activities that are not bringing any profit to the organization or whose profit is minimal that it would be convenient to stop those processes. In some cases, reorganizations take place even when the firm has filed for bankruptcy.  

Under those circumstances, the objective of the entity is to be forgiven for not meeting its payment obligations for a certain period while restructuring its operations to keep the business up and running.

5 0
3 years ago
If you believe in the ________ form of the EMH, you believe that stock prices reflect all relevant information including histori
Alex

Answer:

A)semistrong

Explanation:

As regards to finance, the efficient-market hypothesis known as "EMH"

gives assertion that financial markets can be regards as "informationally efficient. ”

The EMH three forms which are:

1)weak

2) semi-strong

3)strong

it gives evaluation of the influence that MNPI(material Nonpublic Information ) has on market prices. It explains that when markets are efficient then the current prices reflect all information.

Semi-strong-form give a claim that prices gives reflection of all publicly available information, it also claims that

that prices instantly change to to gives a reflection of new public information.

The weak-form gives a claim that prices that is on traded assets such as bonds or stock gives reflection of

all publicly available information in the past . It should be noted that If you believe in the semistrong form of the EMH, you believe that stock prices reflect all relevant information including historical stock prices and current public information about the firm, but not information that is available only to insiders.

3 0
3 years ago
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