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mina [271]
3 years ago
8

A company issued 5%, 20-year bonds with a face amount of $60 million. The market yield for bonds of similar risk and maturity is

6%. Interest is paid semiannually. At what price did the bonds sell? (
Business
1 answer:
Lesechka [4]3 years ago
7 0

Answer:

Total $53.0656 (millions)

Explanation:

We will need to add the present value of the coupon payment

and the present value of the maturity date

<u>present value of the annuity:</u>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C= 60 million x 5% /2 1.5

time= 20 years 2 payment per year = 40

rate = 6% annual = 0.06/2 = 0.03 semiannually

1.5 \times \frac{1-(1+0.03)^{-40} }{0.03} = PV\\

PV $34.6722

<u>present value of the bonds:</u>

\frac{Maturity}{(1 + rate)^{time} } = PV

Maturity 60

time 40

rate           0.03

\frac{60}{(1 + 0.03)^{40} } = PV

PV        $18.3934

<u>The value of the bond will be the sum of both</u>

PV c $34.6722

PV m  $18.3934

Total $53.0656

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If the price of pants increases, what would you expect would happen in the market for pants?
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a consumer faces a tradeoff between labor (????) and leisure (????). she consumes a composite good (????). when the consumer wor
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Trade-off

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Main Content

$606

Given the answers to the question, the complete or implicit income of the consumer would be determined as follows:

When the customer works, she earns an hourly wage of $17.00, therefore when she works for 24 hours, she will earn:

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To learn more about Trade-off

brainly.com/question/7072776

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1 year ago
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HELP ME PLSSS SOMEONE HELPP ILL GIVE BRAINLIEST
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Answer:

$7,875

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