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Evgen [1.6K]
2 years ago
5

Now, consider the situation in which Noah wants to earn a return of 7%, but the bond being considered for purchase offers a coup

on rate of 9%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of
Business
1 answer:
Oxana [17]2 years ago
4 0

Answer:

$1,053.29  

Explanation:

The intrinsic value of the bond is the present value of the bond's future  cash flows, semiannual coupons for 3 years as well as the face value at the bond's maturity payable to bondholders.

The bond price can be determined using a financial calculator bearing in mind that the calculator would be set to its default end mode before making the following inputs:

N=6(there are 6 semiannual coupons in 3 years)

PMT=45(semiannual coupon=1000*9%*6/12=45)

I/Y=3.5(semiannual yield=7%*6/12=3.5%

FV=1000*(the face value of the bond is $1000)

CPT

PV=$1,053.29  

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Explanation:

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The correct answer is letter "B": Internal control over receivables is good.

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Only in the case the internal control of an organization is well-established enough so those account receivables (AR) are paid according to the terms agreed between the organization and its debtors, auditors could consider the balance of the account receivables at a provisional date.

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3 years ago
Malik Boykin is paid $8.20 per hour. and time and a half for any work over 40 hours
Viefleur [7K]

<u>Pay of Malik Boykin:</u>

Step 1:

Adding the total hours for each week:

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Week of 3/17: 40\times\$8.20 = \$328

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