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]
2 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]2 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
​Martinville, Inc. earned revenues of $ 17,000 and incurred expenses of $ 7,000. The company declared and paid cash dividends of
vladimir1956 [14]

Answer:

$10,000

Explanation:

A company's income is either shared out as dividends or kept in as retained earnings. Therefore, the total of retained earnings and dividend paid out is the net income. This is the amount that will reflect in the income statement. In other words, income is calculated first before dividends or retained earnings are declared.

For ​Martinville, income will be calculated first before dividends are paid. Net income will be

=revenue - expenses

=$17,000 -$7,000

=$10,000

Balance in the Income Summary account was $10,000

4 0
3 years ago
The two types of distribution channels are direct and ________________.
Umnica [9.8K]
The answer is (Indirect).
8 0
3 years ago
Read 2 more answers
"What type of research design should a marketing researcher use to find out how many customers there are, what brands they buy a
Taya2010 [7]

Answer:

<u>Descriptive Research.</u>

Explanation:

Descriptive marketing research aims to observe and discover some market phenomena, so that it is possible to describe, classify and interpret such phenomena, such as what is happening in the market, specifying who, what, where and how.

It is usually carried out through discussions, questionnaires, interviews and specific groups.  It serves as a basis for explaining the occurrence of such phenomena encountered.

7 0
3 years ago
Dan would like to save $1,500,000 by the time he retires in 30 years and believes he can earn an annual return of 8%. How much d
Ket [755]

Answer:

$13,241

Explanation:

From the data we were given in the question:

future value = fv = $1,500,000

time = t  = 30 year

rate = r = 8%

We are required to find out How much does he need to invest to achieve his goal

solution

future value = principal ( 1+ rate)^(t-1)  / rate

1500000 = principal (1 + .08)^(30-1)/ 0.08

we make principal, p, subject of the formula.

principal = 1500000  / ( (1 + .08)^(30-1)/ 0.08 )

Principal = 1,500,000 / 113.2832

principal =  13241.15

so Dan needs to invest $13241

6 0
3 years ago
I'LL GIVE BRAINLIST!!!! AND 50 POINTS!!!!
den301095 [7]

the value of accomplishment, success, or reaching your work goals *achievement*

how much you value your surrounding work environment and your level of activity, independence, pay, and security

*comfort*

the value of social service, or having moral values in your work

*altruism*

your level of self-independence and creativity to do your job the way you would like to do it

*autonomy*

how much you value advancement in the company and the social status you get from your job

*status*

how much you value a company’s policies and procedures, and supervision of the actions of other employees

*safety*

Im 100% correct

8 0
3 years ago
Read 2 more answers
Other questions:
  • The pdca cycle is part of _____. deming management applying the rater dimensions management by exception six sigma statistical p
    10·1 answer
  • First, spend a couple of sentences summarizing the Concepts in Action video you watched this week. Then, answer the following. I
    8·1 answer
  • What are three ways computers store information?
    8·2 answers
  • The supply curve for oil shows:
    12·1 answer
  • James Frank has been put in charge of gathering marketing intelligence, disseminating it within his organization, and eventually
    9·1 answer
  • Hardware is adding a new product line that will require an investment of $ 1 comma 450 comma 000. Managers estimate that this in
    5·1 answer
  • How much does a pediatrician make in a month?
    12·1 answer
  • Henry and Charlotte are both 28 years old.
    15·1 answer
  • Provide examples of each: consumer durable goods, consumer nondurable goods, and services.
    10·1 answer
  • poornima gupta is retiring soon, so she is concerned about her investments providing her steady income every year. she is aware
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!