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MAVERICK [17]
2 years ago
6

A 13-year, 6 percent coupon bond pays interest semiannually. The bond has a face value of $1,000. What is the percentage change

in the price of this bond if the market yield to maturity rises to 6.7 percent from the current rate of 5.5 percent
Business
1 answer:
statuscvo [17]2 years ago
8 0

Answer: -10.14%

Explanation:

Original Price of bond:

Interest is paid semiannually so some variables need to be adjusted:

Period = 13 * 2= 26 semi annual periods

Coupon = 6% * 1,000 * 0.5 = $30 per period

Yield = 5.5% / 2 = 2.75%

Price = $1,046

Price after yield increases to 6.7%

Period = 13 * 2= 26 semi annual periods

Coupon = 6% * 1,000 * 0.5 = $30 per period

Yield = 6.7% / 2 = 3.35%

Price = $939.88

Percentage change = (939.88 - 1,046) / 1,046

= -10.14%

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3 years ago
Sheridan Company sells merchandise on account for $5800 to Pharoah Company with credit terms of 1/10, n/30. Pharoah Company retu
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Answer:

check amount is $4,554

Explanation:

given data

sells  account = $5800

credit terms = 1/10, n/30

Company returns  = $1200

to find out

amount of the check

solution

we know here Net Sales  that is

Net Sales = sells  account - Company returns    ................1

put here value

Net Sales= $5,800 - $1200

Net Sales = $4,600

and

Discount will be here

Discount  = 1% of Net Sales

Discount  = $4,600 × 1%

Discount  = 46

so check amount  will be here

check amount = Net Sale - Discount

check amount = 4600 - 46

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3 years ago
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