Aaron has recently started working at a credit union. Which motive might have prompted Aaron to join the credit union?

Bond valuation [LO14-2] Your investment department has researched possible investments in corporate debt securities. Among the a

Sonbull [250]

Answer:

Bond Valuation

Other things being equal, the bond issue that offers the most attractive investment opportunity if it can be purchased at the prices stated is:

= BB Corp. bonds.

Explanation:

a) Data and Calculations:

Maturity period = 20 years

Issue date = January 1, 2021

Maturity date = December 31, 2040

Company Bond Price Stated Rate Annual Interest FV

1. BB Corp. $ 107 million 15 % $15 million $3,518,371,301.23

2. DD Corp. $ 100 million 14 % $14 million 2,827,106,832.58

3. GG Corp. $ 93 million 13 % $13 million 2,260,756,079.53

From an online financial calculator, the future values of the bonds are:

N (# of periods) 20

I/Y (Interest per year) 15

PV (Present Value) 107000000

PMT (Periodic Payment) 15000000

Results

FV = $3,518,371,301.23

Sum of all periodic payments $300,000,000.00

Total Interest $3,111,371,301.2

N (# of periods) 20

I/Y (Interest per year) 14

PV (Present Value) 100000000

PMT (Periodic Payment) 14000000

Results

FV = $2,827,106,832.58

Sum of all periodic payments $280,000,000.00

Total Interest $2,447,106,832.58

N (# of periods) 20

I/Y (Interest per year) 13

PV (Present Value) 93000000

PMT (Periodic Payment) 13000000

Results

FV = $2,260,756,079.53

Sum of all periodic payments $260,000,000.00

Total Interest $1,907,756,079.53

8 0

3 years ago

sometimes sellers have little choice in setting a selling price because it is already marked on the item by the manufacturer. wh

vladimir2022 [97]

One of the example of the commodities in which the sellers have little choice in setting selling price is books

In selling a books, all the price is usually arranged by the publisher and manufacturer and the seller could not really set the selling prices unless they have enough resource to self-publish

4 0

3 years ago

Operating budgets include all of the following except the

lesantik [10]

Answer:

Operating budgets does not include the budgeted balance sheet.

4 0

3 years ago

In year 1, Company A has the following info in its financial statements: Retained Earnings (beginning balance) of $32,000; Retai

Anastasy [175]

Answer:

b.$70,000

Explanation:

The net income could be computed by two method

First method is

Net income = Revenue - expenses

= $100,000 - $30,000

= $70,000

And, the second method is

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$95,000 = $32,000 + net income - $7,000

So, the net income is $70,000

3 0

3 years ago

arantxa Corporation has outstanding 20,000 shares of $5 par value common stock. On August 1, 2014, Arantxa reacquired 200 shares

Naya [18.7K]

Treasury 16,000
Cash 16,000

Cash 14000
Retained Earnings 2,000
Treasury stock 16,000

7 0

3 years ago