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8090 [49]
2 years ago
14

Renfro Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannual

ly. The price of the bonds is $1,100. What is the bond’s yield to maturity, current yield and capital gains yield?
Business
1 answer:
sergiy2304 [10]2 years ago
8 0

Answer:

Renfro Corporation

The bond's yield to maturity is:

= 0.067

The bond's current yield is:

= 0.073

The bond's capital gains yield is:

= -0.006

Explanation:

a) Data and Calculations:

Maturity period of bonds = 10 years

Face value of the bonds = $1,000

Coupon rate = 8% paid semiannually

Price of the bonds = $1,100

Yield to maturity (YTM) = (C + {(FV - PV)/t})/{(FV + PV)/2}

where C = Coupon interest = $80 ($1,000 * 8%)

FV = Face value of the bonds

PV = Present value or price of the bonds

t = number of years

YTM = ($80 + {($1,000 - $1,100)/10})/{($1,000 + $1,100)/2}

= ($80 + {(-$100)/10})/{($2,100)/2}

= ($80 + $-10/$1,050

= $70/$1,050 = 0.06667

= 0.067

Current Yield = Annual interest/Price

= $80/$1,100

= 0.073

Capital gains yield = YTM - Current Yield

= 0.067 - 0.073

= -0.006

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4 0
3 years ago
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Answer:

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Explanation:

Primary data are always in a state of nature.  Primary data are collected by Roland before analysis are from first-hand or primary sources.  For Roland to acquire the data, he must use primary research methods like surveys, interviews, or experiments. Because primary data are acquired with the research project in mind and directly from primary sources, they are contrasted with secondary data.  Secondary data were acquired by some other researchers and used in their analyses before being collected by another researcher as a basis for research continuation.

8 0
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Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.
sweet-ann [11.9K]

Answer:

D. $53,000.

Explanation:

The computation of the ending cash balance is shown below:

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Your company decides to use internal sources for developing new product ideas. Which of the following would not be a common inte
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4 0
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