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Katena32 [7]
3 years ago
14

A General Power bond carries a coupon rate of 8%, has 9 years until maturity, and sells at a yield to maturity of 7%. (Assume an

nual interest payments.) (LO6-1 and LO6-2) a. What interest payments do bondholders receive each year
Business
1 answer:
Mamont248 [21]3 years ago
8 0

Answer:

bondholders will receive 8% of $1,000 = $80

Explanation:

The price of the bond varies depending on the yield to maturity, resulting in higher or lower gains for bondholders, but the actual cash amount received will always be equal to the coupon rate.

The same applies to the issuer of the bond, it may receive more or less money depending on the market rate, which increases or decreases interest expense, but the amount of money paid is always the coupon rate.

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True hope this helped
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Which of the following statements is CORRECT? (Assume that the risk-free rate is a constant.)a. If the market risk premium incre
podryga [215]

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E. If the market risk premium increases by 1%, then the required return will increase by 1% for a stock that has a beta of 1.0.

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Bank dealers in conversations among themselves use a shorthand notation to quote bid and ask forward prices in terms of forward
lora16 [44]

Answer:

C) in swap transactions where the trader is attempting to minimize currency exposure, the actual spot and outright forward rates are often of no consequence.

Explanation:

Swap transactions occur with negotiations based on the profitability of two goods, in relation to the profitability related to the value of a currency of a given location. As the currency value of these two goods can vary significantly, the traders involved in this process always seek to minimize currency exposure, as well as real cash rates. This gives space for bank brokers to use shortened laces notation, where future price predictions are considered.

3 0
3 years ago
You are considering an investment in fields and struthers, Inc, and want to evaluate the firm's free cash flow From the income s
kirill [66]

Answer:

A.) $81,100,000

B.) $64,000,000

C.) $17,100,000

Explanation:

EBIT = $90 million

Tax rate = 21%

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gross fixed assets increased by $56 million

current assets increased by $44 million

current liabilities increased by $36 million

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$81,100,100 - $64,000,000 = $17,100,000

3 0
2 years ago
Mary purchased a home in year 1 for $200,000. She made a 20-percent down payment and financed the rest with a 15 year loan at si
Serjik [45]

Answer:

If Mary decides to itemize her deductions, she can deduct $11,000 from her gross income (= $9,600 + $1,400).

Explanation:

For 2019, Mary can deduct mortgage interests from her first loan and the interests from her home equity loan as itemized deductions. Deductions are available for mortgage debt and other home equity loans up to $500,000 for single filers and $1,000,000 for married joint filers.

8 0
2 years ago
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