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
taurus [48]
3 years ago
8

The bond, which has a $1,000 face value and a coupon rate equal to 10 percent, matures in six years. Interest is paid every six

months; the next interest payment is scheduled for six months from today. Assuming the yield on similar risk investments is 14 percent, calculate the current market value (price) of the bond.
Business
1 answer:
nikitadnepr [17]3 years ago
3 0

Answer:

Market value of bond = 841.14

Explanation:

Explanation:

The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate.

Value of Bond = PV of interest + PV of RV

The value of bond  can be worked out as follows:

Step 1  

Calculate the PV of interest payments

Semi annual interest payment

= 10% × 1,000× 1/2 = 50

PV of interest payment

A ×(1- (1+r)^(-n))/r

r- semi-annual yield = 14%/2 = 7%

n- 6× 2 = 12

= 50× (1-(1.07^(-12)/0.07

= 397.13

Step 2

PV of redemption Value

PV = $1000 × (1.07)^(-12)

= 444.011

Step 3

Price of bond

= 397.13 +444.01

=841.14

Market value of bond = 841.14

You might be interested in
In the context of the Oracle Enterprise Manager, a(n) _____ is a named collection of database access privileges that authorize a
Marta_Voda [28]

Answer: Role

Explanation:

Role is basically refers to the collection of the databases that can easily access the privileges which are assigned to the specific users so that they can able to accessing the resources from the database system management.

  • The database role is also known as the collection of the privileges in the database system.  
  • The main function of the role in the database management system (DBMS) is that it can easily update and also retrieve the business records in an organization.

Therefore, Role is the correct answer.

8 0
3 years ago
Sam believes in rewarding his employees for their hard work. he is acting as a when he processes their merit raises promptly on
masha68 [24]

Answer:

c) leadership is first and foremost about establishing a personal bond with employees

Explanation:

Sam believes in rewarding his employees for their hard work. he is acting as a  _______ when he processes their merit raises promptly on their hire date anniversaries.

As a manager seeks to develop her leadership skills, she should be aware that:

a) there is one best leadership style to which all managers should aspire

b) leadership is primarily about personal efficiency

c) leadership is first and foremost about establishing a personal bond with employees

d) many different styles of leadership can be effective

Sam is acting as a manager when he processes their merit raises promptly on their hire date anniversaries. Leadership is the ability for an individual  to direct or guide other individuals, teams, or entire organizations. Leadership in an organization is directing employees to accomplish a goal or meet the company need.

A leader should be able to communicate effectively with his/her team, be honest and have integrity and also build good relationship among client, team members and the community at large. The first thing a leader must do is establishing a personal bond with employees.

7 0
3 years ago
the averge woman makes 75 cents for every dollar a man makes in the workforce. this statisic would fall under which of the follo
photoshop1234 [79]
Men get treated better than women. Men are more superior. Womes Rights
3 0
3 years ago
In the price range where demand is inelastic, a decrease in price will result in a decrease in total revenue. True or False?
Kamila [148]
The answer is True
Explanation: N/A
5 0
3 years ago
How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with
forsale [732]

Answer:

B) Good economists must possess a rare combination of gifts.

Explanation:

Economics is a social science that focuses on studying scarcity. Since all resources are scarce, economics tries to determine how to allocate resources more efficiently in order to produce the most possible benefits. We are all economists whether we like it or not. When we spend our money (scarce resource) we try to get the largest benefit out of it, the same applies to our time. We decide to study for a test and get a good grade, or simply take a very long nap.

The problem with economics and all social science, is that they are not exact. There is no possible way a scientific research can be done that includes all the economy, there are simply too many billions of transactions and different combinations that it is impossible to do it. Some microeconomics studies can be carried out but only considering a single company or industry and few factors.

Economists must base their research upon past events and develop models that can predict future events. Sadly but true, even meteorologists have a higher percentage of correct predictions than economists.

The few good economists must be very good at math, history, politics, philosophy, psychology, developing abstract ideas and make them concrete ideas, and last but not least must be able to explain all of this to others and convince them.

The problem with applying economic models to the real world are the changing expectations of the general public (psychology and philosophy). One of my teachers had a great saying, "the mouth is the most sensitive organ in your body, but your pocket is by far the most sensitive part".

4 0
3 years ago
Other questions:
  • The title of the job you are seeking should be placed _____.
    10·1 answer
  • In order for ads to be effective, what is the first thing that they must do?
    15·2 answers
  • Which of these contributes to a budget deficit?
    8·1 answer
  • When the Central government cut taxes and increases spending to stimulate the economy during a period of recession, such actions
    8·1 answer
  • The accounts receivable balance is $1,000,000. After adjustment, the allowance for uncollectible account balance is $40,000. Net
    12·1 answer
  • Renue Spa had the following balances at December 31, Year 1: Cash of $15,000, Accounts Receivable of $61,000, Allowance for Doub
    8·1 answer
  • "when a profit-maximizing firm in a competitive market has zero economic profit, accounting profit"
    9·1 answer
  • The extent to which a job requires that a worker perform all the activities that are required to complete a job is called:
    15·1 answer
  • Carlotta Rodriguez purchased six bushes for $19.27 each, a porch swing for $88.22, and a gas grill for $321.77. She must pay the
    9·2 answers
  • Select the pairing that is correctly matched. A. Preferred stock: may be purchased by converting common stock shares into prefer
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!