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maksim [4K]
3 years ago
8

emiannual coupon bonds with the same risk (Aaa) and maturity (20 years) as your company's bonds have a nominal (not EAR) yield t

o maturity of 9%. Your company's treasurer is thinking of issuing, at par, some $1,000 par value, 20-year, quarterly payment bonds. She has asked you to determine what quarterly interest payment, in dollars, the company would have to set in order to provide the same effective annual rate (EAR) as those on the 20-year, semiannual payment bonds. What would the quarterly, dollar interest payment be
Business
1 answer:
garri49 [273]3 years ago
4 0

Answer:

quarterly coupon payment = $22.25

Explanation:

effective annual interest rate of current bonds = (1 + 9%/2)² - 1 = 9.2025%

if the new bonds will have quarterly payments, then the nominal interest rate should be:

1.092025 = (1 + r/4)⁴

⁴√1.092025 = ⁴√(1 + r/4)⁴

1.02225 = 1 + r/4

0.02225 = r/4

r = 8.9% annual

quarterly rate = 2.225%

quarterly coupon payment = $22.25

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Answer:

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Explanation:

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6 0
3 years ago
After an intensive research and development effort, two methods for producing playing cards have been identified by the Turner C
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Explanation:

In this we use the equation which is shown below:

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Y × X - Y × $1.00 - $10,000 = Y × X - Y × $1.50 - $5,000

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6 0
4 years ago
Blanchard Corporation issued a 1-year, 9%, $150,000 note payable on April 30, 2022. Interest expense for the year ended December
WITCHER [35]

The interest expense for the year ended December 31, 2021, for Blanchard Corporation is b) $9,000.

<h3>How is interest expense computed?</h3>

Interest expense is prorated.  Since Blanchard Corporation issued the notes on April 30, the interest expense for the year will not be for 12 months but only 8 months (May to December).

<h3>Data and Calculations:</h3>

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Learn more about interest expense at brainly.com/question/16134508

8 0
2 years ago
After the Russian Empire developed into the communist Soviet Union, which of the following typified life for the common people?S
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Answer:

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3 years ago
Making selection decisions by subjectively combining sources of information according to the general impression of the hiring sp
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