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
Usimov [2.4K]
3 years ago
14

Cailin Corp issues 10,000 callable bonds with same coupon rate and years to maturity in part A, where coupon rate is 8%, maturit

y is 10 years, and the yield is 5%. The grace period for the call is 5 years and the call price of this bond is $1,000. What would be the current price of this callable bond
Business
1 answer:
lisabon 2012 [21]3 years ago
7 0

Answer:

$955.37 per bond

Explanation:

Callable bonds are generally worth less than normal bonds since the call option decreases the value of the bondholder while increases the value of the issuer. Bonds will only be called if the interest rate falls below a certain level and calling them is cheaper (form the issuer's point of view) than keep paying high interest rates.

market price of callable bonds:

  • PV of face value = $1,000 / (1 + 5%)¹⁰ = $613.91
  • PV of coupon payments = $80 x 7.7217 (PV annuity factor, 5%, 10 periods) = $617.74
  • Price of call option = [(1 + 5%)⁵ x $1,000] - $1,000 = $1,276.28 - $1,000 = $276.28

current market price of callable bonds = $613.91 + $617.74 - $276.28 = $955.37

You might be interested in
Is this story: sole proprietorship, partnership, OR corporation?
Mrrafil [7]
It's a <span>partnership. I have to write more words but that's what that arrangement is.</span>
3 0
3 years ago
These are the 5 metrics that matters most when analyzing a digital marketing campaign.
brilliants [131]

Answer:

#1 = Web traffic is the amount of data sent and received by visitors to a website. This amount necessarily does not include the traffic generated by bots.

#2 = The three main traffic sources are direct, referral, and search, although your website may also have traffic from campaigns such as banner ads or paid search.

#3 = The time-on-page is simply the time difference between the pageview hit of the next page to the current page. In this scenario, the time-on-page will be “0” seconds since the person did not go to any other page.

#4 = When an employer taxes your bonus using the percentage method, it must identify the bonus as separate from your regular wages. The withholding rate for supplemental wages is 22 percent. That rate will be applied to any supplemental wages like bonuses up to $1 million during the tax year.

#5 = Exit rate as a term used in web site traffic analysis (sometimes confused with bounce rate) is the percentage of visitors to a page on the website from which they exit the website to a different website.

4 0
3 years ago
What is the difference between the performance of luxury car and normal cars
svetoff [14.1K]

Answer:A luxury car is meant to be shown and only people that are rich could afford a luxury car but a normal car is what you see on a daily basis and it's still a car but a common one.

Explanation:

3 0
3 years ago
Read 2 more answers
Short Answer 7: If the government announced that they were going to reduce the income tax next year, financed by finding a large
GalinKa [24]

Answer:

The labor would increase

Explanation:

When the government decides to lower the income tax in the coming year, which is financed by the findings of a large as well as a previously unknown warehouse for real goods, then there would be an increase in the labor as the reduction in the income tax would cause more and more investment. And thus organizations and firms increase their efficiencies and create more and more output by increasing the labor.

7 0
2 years ago
Lease Plan Effectively Manages Diversity
mylen [45]

Answer:

Lease Plan

1) The trend in gender diversity that appears to be most supported by the outcomes of Lease Plan's program changes is:

Increases in seats on boards of directors—in Fortune 550 firms up to 16.6 percent in 2013 from only 9.6 percent in 1995.

2. Thomas's generic action options for managing diversity that is most illustrated in the case is:

include/exclude

3. Based on the information in the case, the barriers and challenges to managing diversity that were identified in the text that appear to have been present at Lease Plan were:

a. an unsupportive or hostile work environment

b. inaccurate stereotypes

Explanation:

Thomas's include and exclude generic action option emphasizes that more diverse employees should be employed in addition to minority-owned companies being used as vendors.  This option makes it possible for embracing and practicing workplace diversity.  It creates an open-minded and supportive workplace, encouraging the sharing of information and the integration of behavior to accept and value human differences, thereby overcoming stereotypes.

6 0
3 years ago
Other questions:
  • The payroll register of Charbroil Company indicates $1,200 of social security tax withheld and $300 of Medicare tax withheld on
    15·1 answer
  • The Federal Reserve can: A. simultaneously set any money supply and any nominal interest rate target. B. set the target money su
    10·1 answer
  • In the presence of​ shortages, why would a​ firm, such as a restaurant with people waiting for a table or a theater with people
    11·1 answer
  • A bc subteam called the ____ is responsible for establishing the core business functions needed to sustain critical business ope
    5·1 answer
  • Tighter regulations regarding vaccine production and the resultant lower costs and risks of development of vaccines have contrib
    7·2 answers
  • Which of the following is an example of inventory at a company?
    7·2 answers
  • Use commercial bank and Federal Reserve Bank balance sheets to demonstrate the immediate effect of each of the following transac
    13·1 answer
  • Kaspar Industries expects credit sales for January, February, and March to be $205,100, $263,100, and $314,500, respectively. It
    11·1 answer
  • The risk-free rate of return is 9.0%, the expected rate of return on the market portfolio is 14%, and the stock of Xyrong Corpor
    7·1 answer
  • g 2. Two individuals, Susan and Bill, are involved in a bitter dispute over splitting a small prize of £1000. The prize donator,
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!