Ask question

Ask question

All categories

anzhelika [568]

3 years ago

10

Consider a 7-year bond with a 9% coupon and a yield to maturity of 12%. If interest rates remain constant, one year from now the

price of this bond will be _________.

1 answer:

Llana [10]3 years ago

5 0

Answer:

(C) Higher.

Explanation:

The computation of the present value in both the cases are as follows:

In the first case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 7

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $863.09

In the second case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 6

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $876.66

So as we can see that the price of the bond would increased

You might be interested in

Dabney Electronics currently has no debt. Its operating income is $20 million and its tax rate is 40%. It pays out all of its ne

ValentinkaMS [17]

Answer:

$29 per stock

Explanation:

WACC=PBIT*(1-tax)/Market value of firm

10%=$20,000,000*(1-40%)/Market Value of the firm

Market Value of the firm=$20,000,000*60%/10%=$120,000,000

Stock price for all shares=$120,000,000*60%=$72,000,000

Stock price per share=$72,000,000/2,500,000=$29 per share

6 0

4 years ago

One way of shooting a bow is the instinctive aiming method. what is true about this method? you look at the target with the righ

Sergio [31]

Answer: this method takes longer to perfect than the bowsight method.
In instinctive aiming method. You aim at the target with your both eyes open so looking<span> at the target with the right eye closed or with the left eye closed is not true. </span> It is also not true that this method is less versatile than the bowsight method. <span>It is true that this method takes longer to perfect than the bowsight method.</span>

5 0

3 years ago

Carla Vista Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $500,0

riadik2000 [5.3K]

Answer and Explanation:

The Preparation of analysis showing whether the company should eliminate the gloves and mittens line is shown below:-

Particulars Continue Eliminate Net Income

Increase (Decrease)

Sales $500,000 0 ($500,000)

Variable

expenses $360,000 0 $360,000

Contribution

margin $140,000 0 ($140,000)

Fixed costs $148,000 $36,000 $112,000

Net income ($8,000) ($36,000) ($28,000)

The analysis showing that the Carla Vista Corporation should manufacture gloves and mittens else there loss will be increased by $28,000

4 0

3 years ago

the state transferred ownership of property to roger and pauline. which transfer document would the state agency use?

elena55 [62]

The state transferred ownership of property to Roger and Pauline, the transfer document that the state agency will use us a deed of assignment.

<h3>What is a deed of assignment?</h3>

It should be noted that the deed of assignment simply means an instrument that's used to illustrate that a transfer has taken place.

Any property transaction needs a deed of assignment because it serves as the primary record between the seller and the buyer proving that all negotiations, inquiries, and other required due diligence have been made, the purchase price has been paid, and all other prerequisites have been met.

In this case, the state transferred ownership of property to Roger and Pauline, the transfer document that the state agency will use us a deed of assignment.

Learn more about assignment on:

brainly.com/question/13858252

#SPJ1

7 0

2 years ago

Wichita Industries' sales are 10% cash and 90% on credit. Credit sales are collected as follows: 40% in the month of sale, 50% i

Nikolay [14]

Answer:

$57,100

Explanation:

The technique for this question to follow closely the payment cycle

<u>Calculation of January Cash Receipts</u>

Cash Sales ($59,000 x 10%) $5,900

Credit Sales in January ($59,000 x 40%) $23,600

Credit Sales in December ($51,000 x 50%) $25,500

Credit Sales in December ($21,000 x 10%) $2,100

Total $57,100

Conclusion

the expected cash receipts for January from the current and past sales is $57,100

4 0

3 years ago