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REY [17]
3 years ago
14

The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Cu

rrently, the bonds sell for $1,032. What is the yield to maturity
Business
1 answer:
shtirl [24]3 years ago
8 0

Answer: 6.5%

The yield to maturity is 6.496% (approximated to 6.5% to nearest tenth)

Explanation:

Using the formula (semi annually YTM)

YTM = C + (fv - pv) /t ÷ (fv + pv)/2

C= coupon rate = 7%(1000)= $70

fv = face value = $1,000

pv = price value = $1,032

t = Time to maturity in years = 8years

C + (fv - pv) /t = 70 + (1000–1032)/8

= 70 – (32 /8) =66

(fv + pv) /2 = (1000 + 1032) /2

= 2032 / 2

= 1016

YTM = 66 / 1016

YTM = 0.06496

In % = (6496 / 100,000) × 100

= 6.496%

Approximately.... 6.5%

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Nutka1998 [239]

EPS is Net Income attributed to shareholders divided by no. of shares outstanding. The dividend on preferred stock is subtracted from net income before calculating earnings per share (EPS). Following is the formula for Earnings per share

EPS = (Net Income – Preferred Dividend)/ No. of common stocks outstanding

= ($611,000 - $84,000)/ 303,000

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Therefore, earnings per share would be $1.74.

8 0
3 years ago
Meacham Enterprises' bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15
Flauer [41]

Answer:

Yield to call (YTC) = 7.64%

Explanation:

Yield to call (YTC) = {coupon + [(call price - market price)/n]} / [(call price + market price)/2]

YTC = {135 + [(1,050 - 1,280)/5]} / [(1,050 + 1,280)/2]

YTC = 89 / 1,165 = 0.07639 = 7.64%

Yield to call is how much a bondholder will earn if the bond is actually called, and it may differ from yield to maturity since the call price is generally higher than the face value, but the yield to maturity generally is longer than the call period.

7 0
3 years ago
You are attending college in the fall and you need to purchase a computer. You must finance the purchase because your parents wi
rodikova [14]

The correct answer is installment credit. The explanation is below.

Installment credit allows you to purchase an item and then pay for it in installments. The reason that this would be the best option for you is that you do not have the money now to make the purchase, but you are able to make smaller monthly payments in order to purchase a computer.

Installment credit is better than revolving credit for new borrowers. Revolving credit would allow you to charge additional purchases on your revolving credit account. The installment plan only finances one item, rather than like a credit card, which is how revolving credit works. You would not choose non-installment credit because this would require you to make this payment all at once in a short period of time. It would not allow you to spread the payments out over time.

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3 years ago
Furs unlimited is using a combination of advertising and personal selling to increase the sales of its fur coats. this activity
My name is Ann [436]

Answer: C. Promotion

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Furs unlimited needs to use the technique of marketing mix called promotion, to give more exposure to their products then get more popular that should result in a incrementation of their sales. The purpose of the promotion is also to capture the customer to obtain brand loyalty.

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3 years ago
Why doesn’t a change in the price of eggs cause a change in the demand for eggs?
FromTheMoon [43]
Supply and demand changes the price of eggs
6 0
3 years ago
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