1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Evgen [1.6K]
3 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]3 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  

You might be interested in
Stock R has a beta of 2.5, Stock S has a beta of 0.55, the required return on an average stock is 13%, and the risk-free rate of
avanturin [10]

Answer:

19.50%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

For Stock R

= 3% + 2.5 × (13% - 3%)

= 3% + 2.5 × 10%

= 3% + 25%

= 28.00%

For Stock S

= 3% + 0.55 × (13% - 3%)

= 3% + 0.55 × 10%

= 3% + 5.5%

= 8.50%

The difference would be

= 28% - 8.5%

= 19.50%

3 0
4 years ago
The Next Monet, Inc., operated art schools. At one of its classes, John Picasso (no relation to the great artist) was praised by
Schach [20]

Answer:

Option B                            

Explanation:

In simple words, The given case is related to the conclusion made by the court in the famous case of  Vokes versus Arthur MurrayLinks, in which the jury in the court rules that,  a determination of a party carrying better information about a subject matter may be treated as a matter of fact even though it would be treated as an opinion if the parties were speaking for deal  on equal conditions.

7 0
4 years ago
A company with 108,000 authorized shares of $4 par common stock issued 33,000 shares at $12. Subsequently, the company declared
liq [111]

Answer:

$20,460

Explanation:

Data provided as per the question below:-

Common stock = 33,000 shares

Market price per share = $31

Stock dividend percentage = 2%

The computation of stock dividend is shown below:-

Price per share = Common stock × Market price per share

= 33,000 × $31

= $1,023,000

Stock dividend = Price per share × Stock dividend percentage

= $1,023,000 × 2%

= $20,460

8 0
3 years ago
Which describes the liability of an owner of a sole proprietorship?
Vanyuwa [196]
Unlimited


hope this helps
3 0
3 years ago
Read 2 more answers
Compared to those people who prefer to play it safe, individuals who are more comfortable taking risks are more likely to reach
steposvetlana [31]

The answer is true. In economics, the supposition of ceteris paribus, a Latin expression that means "with other things the same" is significant in defining causation. It helps separate numerous independent variables touching a dependent variable. Causal relationships among financial variables are hard to separate in the real world, ever since most economic variables are typically affected by more than one cause, but reproductions often hinge on a supposition of independent variables.

8 0
3 years ago
Other questions:
  • Adison Winery had beginning long-term debt of $41,436 and ending long-term debt of $46,883. The beginning and ending total debt
    12·1 answer
  • Production-constrained decision. (You may select more than one answer. Single click the box with the question mark to produce a
    10·2 answers
  • During the​ year, Sheldon Company had net credit sales of $ 47 comma 000. At the end of the​ year, before adjusting​ entries, th
    14·1 answer
  • 28-In​ 2008, in order to encourage people to spend more money and stimulate the​ economy, Congress passed the American Reinvestm
    6·1 answer
  • Many organizations are adapting to the environment by developing more of a(n) _____ relationship rather than a(n) _____ relation
    8·1 answer
  • Consider the relative liquidity of the following assets: Assets 1. A $50 bill 2. The funds in a savings account 3. A boat you ow
    9·1 answer
  • ExxonMobil has historically had a very low debt-to-equity ratio within the oil industry, but it recently issued $12 billion in n
    7·2 answers
  • Following is information on two alternative investments being considered by Jolee Company. The company requires a 10% return fro
    11·1 answer
  • g When a sexual harassment complaint is filed speculation sometime occurs about who is the complainant. One result can be retali
    7·1 answer
  • Suppose Hubert and Kate are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!