although the majority of americans think budgeting is important, about_____

Sure Tea Co. has issued 6.3% annual coupon bonds that are now selling at a yield to maturity of 9.20% and current yield of 8.777

alina1380 [7]

Answer:

Ans. 26 years is the remaining maturity of this bond.

Explanation:

Hi, we have to find the price of the bond, so we use the following formula.

$CurrentYield=\frac{Coupon}{Price}$

This means that:

$Price=\frac{Coupon}{CurrentYield} =\frac{63}{0.08777} =717.79$

Let´s not forget that the Coupon is calculated by the following formula.

$Coupon=FaceValue*CouponRate=1,000*0.063$

Now that we found that the price of the bond is $717.79, we have to bring to present value the remaining coupons and the principal that is paid at the end, so we have to solve for "n" the following equation, discounted at the yield to maturity.

$Price=\frac{Coupon((1+YTM)^{n}-1) }{YTM(1+YTM)^{n} } +\frac{FaceValue}{(1+YTM)^{n} }$

Let´s fill up what we can

$717,79 =\frac{63((1+0.092)^{n}-1) }{0.092(1+0.092)^{n} } +\frac{1,000}{(1+0.092)^{n} }$

But to solve for "n" is pretty painful, so we can use a financial calcultator o MS Excel. Please find the MS Excel sheet that I used with the "Seek Goal" formula instruccions as follow.

Set Cell: $C$19

To Value: 717,79

By Changing cell: $C$14

So the answer is 26

Best of luck.

Download xlsx

4 0

4 years ago

Perfect substitutes A. always have indifference curves with slopes of minus1. B. have horizontal indifference curves. C. always

torisob [31]

Answer:

Option (D) is correct.

Explanation:

Perfect substitute goods are the goods which can be used in place of each other.

Perfect substitutes refers to the goods which are having identical characterstics, features and provide the exactly same level of satisfaction.

The marginal rate of substitution for these perfect substitute goods remains constant which means that the trading of one good for the another good is at a fixed rate.

3 0

4 years ago

Companies typically like to design scorecards that fit their business and industry. As a result, there are software applications

olchik [2.2K]

Answer:

a. Performance dashboards

Explanation:

Based on the scenario being described within the question it can be said that these scorecard applications are often referred to as Performance Dashboards. These are a type of management tool that companies use in order to measure the company's performance and monitor/manage different processes in order to achieve business goals. These systems are many times offered by other companies and linked to a firm's enterprise software system for customized results.

7 0

3 years ago

Corporations issue convertible debt for two main reasons. One is the desire to raise equity capital that, assuming conversion, w

just olya [345]

Answer:

corporations can obtain financing at lower rates

Explanation:

Convertible debts are a type of long term capital financing that has the option of converting the debt into stock or equity. Corporations issue convertible debts to balance equity and liabilities.

A convertible debt will usually have a lower interest because the holder of the debt has the option of converting it to stock. A conversion occurs after a certain period. Investors willingly opt for convertible debts as the conversion aspect makes them less risky. Companies will opt for them because they are less expensive in interest payments, hence a cheaper form of obtaining capital.

4 0

3 years ago

A decrease in the supply of a good can be expected to cause ____ in the equilibrium price of the good and ____ in the equilibriu

JulsSmile [24]

Answer:

Increase, Decrease

Explanation:

A decrease in the supply results in many buyers competing for very few goods. If the demand is constant, the quantity supplied and price have an indirect relationship. A decrease in the volume of supplied results in an increase in price. Many buyers will be competing for a few products causing the equilibrium price to increase.

A decrease in supply will cause the quantity available for buyers to buy to decline. Consequently, the volume purchased will be fewer. Equilibrium quantity will, therefore, decrease.

4 0

3 years ago

although the majority of americans think budgeting is important, about______ of americans actually use a budget.