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larisa86 [58]
3 years ago
14

On January 1, GHI Corporation issued four-year bonds with a face value of $100,000. The bonds have a stated interest rate of 4 p

ercent. When the bonds were issued, the market interest rate was 5 percent. The bonds pay interest once per year on December 31. Determine the amount that GHI received at issuance. Your answer should be rounded to the nearest full dollar (i.e., no cent
Business
1 answer:
Eva8 [605]3 years ago
6 0

Answer:

Year   Cashflow    [email protected]%        PV

              $                                  $

1          4,000         0.9524      3,809.60

2         4,000         0.9070       3,628.00

3         4,000         0.8638        3,455,20

4         104,000     0.8227         85,560.80

      Market price of the bond   96,454

The amount that GHI received at issuance is $96,454.

Explanation:

In this case, we need to calculate the current market value of the bond.  The annual coupon is calculated as R = 4% x $100,000 =$4,000, which is 4% of the face value. We will discount the annual coupon and face value  of the bond at 5% market interest rate. The cashflow for year 4 is the aggregate of coupon and face value of the bond. The current market value of the bond calculated above is the amount that GHI received at issuance of the bond.

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A firm is planning on paying its first dividend of $2 three years from today. After that, dividends are expected to grow at 6% p
BabaBlast [244]

Answer:

The intrinsic value of a share today is $16.87

Explanation:

Intrinsic Value of the share is calculated as below.

Dividend Valuation method is used to value the stock price of a company based on the dividend paid, its growth rate and rate of return. The price is calculated by calculating present value of future dividend payment.

Value of Share = Dividend / (Rate of return - Growth rate)

placing values in the formula

Value of share = $2 / (14% - 6%) = $25

$25 is the value of share after 3 year, to calculate today's value we have to discount it as below

Today's value of share = $25 x ( 1 + 14% )^-3 = $16.87

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3 years ago
Which rules and regulations govern advertising to protect the consumer from deceptive or misleading claims?
Fed [463]

Advertising regulations provide a set of rules and regulations that protects the consumer from deceptive or misleading claims.

Answer: Option (d)

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Advertising regulations is a consumer protection act that safeguards the peoples from being misled in false information about sales and trade.

These regulations evaluates the bad products in a company and makes it fail easily.

It explains the detailed information about the severity of false product in a company and prevents the people from consuming that product.

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3 years ago
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3 years ago
Mapleview Inc. has the following budgeted sales:
Irina18 [472]

Answer:

Total cash= $265,000

Explanation:

Giving the following information:

Sales:

July $200,000

August $300,000

September $250,000.

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Sales on account August= (300,000*0.6)*.5= 90,000

Total cash= $265,000

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