Rosita purchased a bond for $991.23. She sold the bond for $1,003.42 after 6 months and earned a total return of 5.40% on this investment. Suppose this bond has semiannual interest payments, then what should be the coupon rate of it?

Answers

Answer 1

Answer:

The coupon rate of the bond should be 8.27%.

Explanation:

This can be calculated using the following formula:

Total return rate = (Selling price + [(Coupon rate * Face value) / 2] - Purchase price) / Purchase price ............ (1)

Where;

Total return rate = 5.40%, or 0.054

Selling price = $1,003.42

Coupon rate = ?

Bond face value = $1,000

Purchase price = $991.23

Substituting the values into equation (1) and solve for Coupon rate, we have:

0.054 = (1,003.42 + [(Coupon rate * 1,000) / 2] - 991.23) / 991.23

0.054 * 991.23 = 1,003.42 + [(Coupon rate * 1,000) / 2] - 991.23

53.53 - 1,003.42 + 991.23 = (Coupon rate * 1,000) / 2

41.34 * 2 = Coupon rate * 1,000

82.68 = Coupon rate * 1,000

Coupon rate = 82.68 / 1,000

Coupon rate = 0.08268, or 8.268%

Rounding to 2 decimal places, we have:

Coupon rate = 8.27%

Therefore, the coupon rate of the bond should be 8.27%.


Related Questions

Kate owns a refreshment-stand business at the community ball park. She goes to a warehouse like Sam's and purchases snacks and canned soda that she will sell at her stand. Kate is considered a

Answers

Answer:

retailer

Explanation:

From the question, we are informed about Kate who owns a refreshment-stand business at the community ball park. She goes to a warehouse like Sam's and purchases snacks and canned soda that she will sell at her stand. In this case Kate is considered a retailer. A retailer is someone or business that buy goods from the wholesaler or manufacturers and sell to the consumer in small quantities. Their role is important because they are found in promoting sustainability of consumption and production.

Urban Bloom, Inc.'s books show an ending cash balance of $18,000 before preparing the bank reconciliation. Given the bank reconciliation shows outstanding checks of $4600, deposits in transit of $3600, NSF check of $260, and interest earned on the bank account of $170, the company's up-to-date ending cash balance equals:

Answers

Answer:

$17,910

Explanation:

With regards to the above, we would calculate the company's up to date ending cash balance as;

Up to date ending cash balance = Ending cash balance per books + Interest received from bank - NSF check

Up to date ending cash balance = $18,000 + $170 - $260

Up to date ending cash balance = $17,910

*Please note that outstanding checks and deposits in transit are used mainly to reconcile bank statements and not cash or book balance.

If Bounder Dog Supplies, Inc. purchased inventory at $2,200 list price and the terms were 3/10, n/30, what would be the value associated with the inventory if payment was made within 10 days? $2,200. $2,134. $2,334. $2,268.

Answers

Answer:

the  value associated with the inventory is $2,134

Explanation:

The computation of the value associated with the inventory is shown below

= Purchase value of the inventory - discount allowed

= $2,200 - $2,200 × 3%

= $2,200 - $66

= $2,134

hence, the  value associated with the inventory is $2,134

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

g At the optimal quantity of a public good: A. marginal benefit exceeds marginal cost by the greatest amount. B. total benefit equals total cost. C. marginal benefit equals marginal cost. D. marginal benefit is zero.

Answers

Answer: C. marginal benefit equals marginal cost.

Explanation:

As is the case in the private sector , the optimal quantity of a public good is the quantity where Marginal benefit (revenue in private) equals marginal cost.

This is the optimal quantity because any quantity made that is more than this will result in marginal cost being greater than marginal benefit. This is therefore the highest quantity that can be produced without costs exceeding benefits so it is optimal.

The inflation rate over the past year was 3.7 percent. If an investment had a real return of 9.2 percent, what was the nominal return on the investment?

Answers

Answer:

The nominal return on the investment is 13.2404%

Explanation:

The computation of the nominal return on the investment is shown below:

As we know that

nominal return = (1 + real rate) × (1 + inflation rate) - 1

= [(1  +0.092) × (1 + 0.037)] - 1

= (1.037 × 1.092) - 1  

= 13.2404%

Hence, the nominal return on the investment is 13.2404%

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

Moving truck makes the displacement of (180m) toward east in period of(9.0s). What is the average velocity of the truck?someone please help!!

Answers

Answer:

20m/s due east

Explanation:

Given parameters:

Displacement  = 180m due east

Time taken = 9s

Unknown:

Average velocity of the truck  = ?

Solution:

The average velocity is the displacement divided by the time taken;

   Average velocity  = [tex]\frac{displacement}{time}[/tex]  

Insert the parameters and solve;

 Average velocity = [tex]\frac{180}{9}[/tex]   = 20m/s due east

[tex]\mathrm {Hey, there!}[/tex]

Let's solve your problem:

20 m/s due east is your answer.

For this question, we will use the displacement method.

The displacement method states:

You divide the larger number by the smaller number.

--- [tex]\mathrm {Equation}[/tex] - [tex]\mathrm {180m / 9.0 = 20.0}[/tex]

. Is it illegal to drive without auto insurance?

Answers

Yes because if you get into a car accident and you’re at fault then you have to pay the claims. Hope this helped
Technically yes, but sometimes you aren’t caught. But it’s in your best interest to have it

Historically, the ________ risk an investor is willing to accept, the ________ the potential return for the investment.

Answers

Answer:

The correct option is (A)  more, greater

Explanation:

According to the risk return trade off, the risk is increased with the return that means if the returns are increased the risk is also increased and vice versa

So as per the given scenario, if there is more risk that investor wants to accept so the return should be more for the investment. This represents the direct relationship between the risk and return of the investment

hence, the correct option is (A)  more, greater

What accounts for increases in both the relative wage and the relative employment of U.S. nonproduction workers during the 1980s?

a. The relative demand for nonproduction workers fell.
b. The relative supply of nonproduction workers rose.
c. The relative demand for nonproduction workers rose.
d. The relative supply of nonproduction workers fell.

Answers

Answer:

My Answer is D

Explanation:

Im not sureeee

A bank will often hold government securities as an asset. If a bank were to sell $100,000 in government securities to an individual who paid for the bond in cash and the bank placed this cash in their vault, by how much would the money supply change as a result

Answers

Answer:

e. It would decrease by S100,000.

Explanation:

Options are "a. It would increase by $100,000 multiplied by the reciprocal of the required reserve ratio. b. It would decrease by $100,000 multiplied by the reciprocal of the required reserve ratio. c. There would be no change to the money supply. d. It would increase by $100,000. e. It would decrease by $100,000."

An individual paid cash in exchange of bond to bank and bank has that cash in its vault. Now, the bank sells securities worth $100,000 to that individual. In this case, the cash at bank will decrease by the amount of securities, that is $100,000 and the money supply also reduce by the same amount of $100,000.

John House has taken a $250,000 mortgage on his house at an interest rate of 6 percent per year. If the mortgage calls for 20 equal, annual payments, what is the amount of each payment?

Answers

Answer:

$21,796.14

Explanation:

Use the Time Value of Money techniques to calculate the amount of each installment (PMT)

PV = $250,000

i =  6 %

n = 20

P/yr = 1

FV = $0

PMT = ?

Using a Financial calculator to input the values as above, each annual instalment/payment will be $21,796.14.

Scott is saving for a down payment to buy a house. The account earns 7.7% interest compounded semi-annually, and he wants to have $10,000 in 5 years. What must his principal be

Answers

Answer:

$6,853.86 ≈ $6,854

Explanation:

we need to determine the present value of Scott's account:

present value = future value / (1 + i)ⁿ

future value = $10,000i = 3.85%n = 5 x 2 = 10 periods

present value = $10,000 / (1 + 0.0385)¹⁰ = $10,000 / 1.459 = $6,853.86

the present value formula allows us to calculate how much a future cash flow is in today's dollars

Answer:

6853.86

Explanation:

Wildhorse Co. gathered the following reconciling information in preparing its August bank reconciliation: Cash balance per books, 8/31$30200 Deposits in transit1300 Notes receivable and interest collected by bank7300 Bank charge for check printing170 Outstanding checks17300 NSF check1470 The adjusted cash balance per books on August 31 is

Answers

Answer:

$35,860

Explanation:

The adjusted cash balance per books on August 31 is calculated as;

= $30,200 cash balance per books + $7,300 notes receivable and interest collected by bank - $170 bank charge for check printing - $1,470 NSF check

= $35,860.

Therefore, the adjusted cash balance per books on August 31 is $35,860

What is a hallmark of essembly lines in Henry fords time?

Answers

Answer:

On December 1, 1913, Henry Ford installs the first moving assembly line for the mass production of an entire automobile. His innovation reduced the time it took to build a car from more than 12 hours to one hour and 33 minutes.

Explanation:

Fleury Security Limited (FSL) is projected to have earnings per share (EPS) of $3.50 next year, and the firm’s dividends are 30% of earnings. Investors have a required return on FSL shares of 12.4%. The company has a profit margin of 10%, total asset turnover of 0.9, and total debt ratio of 0.4.
a) Calculate the ROE of the company.
b) Calculate the price of FSL shares.
c) How much of that price is due to future growth opportunities?

Answers

Answer and Explanation:

The computation is shown below:

a) For ROE of the company

As we know that

Debt ratio = 1 - (1 ÷  Equity multiplier)

0.4 = 1 - (1 ÷ Equity multiplier)

(1 ÷ Equity multiplier) = 0.6

Equity multiplier = 1 ÷ 0.6

= 1.6667

Now ROE is  

ROE = Net Profit Margin × Total Asset Turnover × Equity multiplier

= 10% × 0.9 × 1.6667

= 15%

b) For the Price of FSL shares

Expected Dividend next year (D1) = Projected EPS × Dividend payout ratio

= $3.50 × 30%

= $1.05  

And, Required Return(ke) = 12.4%

Growth Rate(g) = ROE × (1 - Dividend payout ratio)

= 15% × (1 - 0.30)

= 10.5%

And finally the Price of STock:-

= D1 ÷ (ke - g)

= $1.05 ÷ (0.124 - 0.105)

= $55.26

C. For  Present Value of Growth Opportunity(PVGO)

As we know that

Present Value of Growth Opportunity(PVGO) = Stock Price - (EPS ÷ Ke)

= $55.26 - ($3.50 ÷ 12.4%)

= $27.03

This table can be used to organize Gigi’s credit card balances and payments over 6 months. The annual percentage rate on the credit card is 14%.

Gigi’s Credit Card Payments
Month
Balance
Payment
Interest Rate
Interest Charged
1
$650
$300
0.01167
$4.08
2
$354.08
$50
0.01167

3
$307.63
$50
0.01167

4
$260.64
$50
0.01167

5
$213.10
$50
0.01167

6
$165
$50
0.01167


What is the amount of interest charged for the first 6 months? (16.34)

Answers

The correct answer is the first option, or 16.34

Just got it right on the edge 2020 exam review, hope this helps!! :)

If you were an investor in a rent-to-own business that takes more than a year to collect revenues while the customers take immediate possession of the goods: Would you prefer to have the income statement prepared by cash basis or by accrual basis and why

Answers

Answer:

I would prefer cash basis over the accrual bases.

Explanation:

Remember accounting entries are prepared on the basis of Accrual Principle. That is transactions are recognized when they meet the definition and recognition criteria of assets, liabilities, incomes and expenses not when cash is received. Taxable Income calculation follows this accrual principle as well.

This means an will mean that as an investor in a rent-to-own business, i will be taxed more often on the Revenues which are not yet paid for and this will be bad for my liquidity.

I would want to have my cash and pay the taxes when i have actually received cash on my revenues so that i wont run into liquidity problems. This is only possible if the cash basis was to be used.

During 2020, Benson purchased $1,450,000 of raw materials, incurred direct labor costs of $250,000, and incurred manufacturing overhead totaling $160,000. How much is total manufacturing costs incurred during 2020 for Benson?

Answers

Answer:Total manufacturing cost = $1,876,000

Cost of goods sold =$1,668,000

Explanation:

The  Total manufacturing costs is defined as  how much a company uses in production of  its inventory at a particular time. It takes three costs into consideration and they are Direct materials, Direct labor and Manufacturing overhead.

it is calculated using the formulae.

Total manufacturing cost = Direct materials + Direct labor + Manufacturing overhead

Direct raw materials =Beginning raw materials +materials purchased -Ending raw materials

=84000+1,450,000-68000=$1,466,000

Total manufacturing cost =$1,466,000+ $250,000 +$160,000

= $1,876,000

The total manufacturing costs incurred during 2020 for Benson is $1,876,000

Cost of goods sold =  Beginning Inventory of Finished goodd + Cost of Goods – Ending Inventory Of finished goods.

 $100,000 +  $1,660,000 - 92,000

$1,668,000

Note :

The beginning inventory =the value of inventory at  end of the previous year.

Where to write the account name? *
a)At the bottom of T account
b)At the top of T account
c)In the debit side
d)In the credit side

Answers

Answer:

b)At the top of T account

Explanation:

The account name is always written at the top of a T account. The account name is also the account title.

A T account has a standard format. The title or the name is what differentiates them.

In a slow year, Deutsche Burgers will produce 3.2 million hamburgers at a total cost of $5.4 million. In a good year, it can produce 5.4 million hamburgers at a total cost of $6.1 million. a. What are the fixed costs of hamburger production

Answers

Answer:

Fixed costs= $4,382,800

Explanation:

Giving the following information:

3.2 million hamburgers at a total cost of $5.4 million.

5.4 million hamburgers at a total cost of $6.1 million.

To calculate the fixed cost, we can use the high-low method. We will use the following formulas:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (6,100,000 - 5,400,000) / (5,400,000 - 3,200,000)

Variable cost per unit= $0.318

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 6,100,000 - (0.318*5,400,000)

Fixed costs= $4,382,800

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 5,400,000 - (0.318*3,200,000)

Fixed costs= $4,382,800

Being held accountable and obligated to fulfill a commitment is ___.

Assets
Liability
Partnership
Logistics

Answers

The answer is Liability

Being held accountable and obligated to fulfill a commitment is Liability. Thus, option B is correct.

What is the liability?


A liability is defined as the future sacrifices of economic advantages that an entity is obligated to make to other entities as a result of previous transactions or other past occurrences.

In accounting, liability refers to any type of financial obligation that a company must pay to another person or company at the conclusion of an accounting period.

Financial advantages such as money, products, or services are used to satisfy liabilities. It is a company's future obligation to pay money to other persons or businesses.

Therefore, option B is correct, that being held accountable and required to fulfill a contract is Liability.

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The presence or absence of a felt need for change is a key issue in the __________ phase of the planned change process.

Answers

Answer:

unfreezing

Explanation:

There are three stages of change which are; ✓ unfreeze

✓change

✓refreeze

unfreezing phase of the planned change process can be regarded as the first stage of change, it involves creating of awareness and break down of status quo so that another way of operation can be developed It should be noted that the presence or absence of a felt need for change is a key issue in the unfreezing phase of the planned change process.

As a meeting leader how should you aim to speak to the participants

Answers

Question: As a meeting leader, how should you aim to speak to the participants?

Answer: It's important you stay professional about things, so talk as formal as possible while still being comfortable enough for your peers to not be intimidated. Remember to be lively yet mature, loud but respectful, excited but diluted, etc.

Uplifting Note: Try making something tasty for your next meal, I made macaroons [not the little cookies, the coconut ones] for a snack!

The forces of love, affection, guilt, fear, or passion that compel consumers to buy

Answers

Answer:

food

Explanation:

what is the question

The forces of love, affection, guilt, fear, or passion compel consumers to buy food.

Who are the consumers?

Consumers are those people or a group who intends to order or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who are not directly related to entrepreneurial or business activities. The term most commonly refers to a person who purchases goods and services for personal use.

Consumers, by definition, include us all," said President John F. Kennedy, offering his definition to the United States Congress on March 15, 1962. This speech became the basis for the creation of World Consumer Rights Day, now celebrated on March 15. In an economy, a consumer buys goods or services primarily for consumption and not for resale or commercial purposes. Consumers pay some amount of money for goods or services.

As such, consumers play a vital role in the economic system of a capitalist system and form a fundamental part of any economy.

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On February 28, Katherine wrote a check number 1021 to Hoopers Market for $189.43. Her beginning balance was $584.77. Calculate the new balance.

Answers

Answer:

Her new balance is $395.34

Explanation:

You take the starting balance of $584.77 and subtract it by the amount spent which was $189.43. Which gives you $395.34

Hyper, Inc. is a growing firm that chooses to payout only 20% of its earnings as dividends (thus, it has a plowback ratio of .8). Hyper expects EPS next year of $5 and and a Return on Equity of 15%. This ROE is expected to be maintained indefinitely and is also appropriate to use for Hyper's required return on equity. Given this information, what is the current price of Hyper, Inc. stock

Answers

Answer:

a.$33.33

Explanation:

Options are "a.$33.33 , b. $30.13 , c. $16.67 , d. $26.66"

EPS1 = $5

D1 = 0.20($5) = $1

Sustainable Growth Rate = (0.80)(0.15) = 12%

As per Dividend Discount Model,

Stock Price = D1/(r - g)

Stock Price = 1/(0.15 - 0.12)

Stock Price = $33.33

Therefore, the current price of Hyper, Inc. stock $33.33

Partnership should be one of the 8 Ps, but it's not because it doesn't have enough of an effect on organizations.
O True
False

Answers

Answer:

I think true and thanks for point

United States Steel Corporation’s (X) 7.5% bonds due in 2022 were reported as selling for 103.2.

Icon Were the bonds selling at a premium or at a discount? Why is United States Steel able to sell its bonds at this price?

Answers

Answer:

because they are able to create it at a lower price

Explanation:

As a result of the lower market interest rate for bonds of comparable quality, the bonds were being sold for a premium.

What are bonds?

The loan given by an investor to a debtor is represented by a bond, a fixed-income financial instrument. The terms of the loan and the payments are outlined in a bond, which can be compared to an I.O.U. between the lender and borrower.

The amount the bank charges the borrower when making a loan of any kind is referred to as the interest rate. This interest rate-based loan amount must be repaid by the borrower along with the principal sum.

Keeping in mind that investors are prepared to pay more for securities that have lesser potential risk, the bonds are going to sell for more than their nominal value if the market rate of return is lower than the contract rate of interest.

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Why is it important to study ethics in school?
O A. Business values have improved since ethics was introduced into
the curriculum.
O B. Knowledge of ethical practices can stop you from making bad
decisions due to ignorance.
O C. It will make people more ethical.
D. It is required for entry into graduate business schools.

Answers

Answer:

b.

Explanation:

Knowledge of ethical practices can stop you from making bad decisions due to ignorance it is important to study ethics in school. Thus, option (b) is correct.

What is school?

The term school refers to the educational institutes that are involved with students and teachers. The teacher is a guide for the student. The teacher's job is to teach the student as related to the study, courses, and future guidance. The student is able to effectively communicate, build punctuality, decorum, ethics, and value.

According to the school are the based on the study ethics are the ethical practices can stop you from making bad decisions due to ignorance.  The person can earn money as they need to education. The education is level wise and based on capacity of the revised knowledge of the student. The education is included a basic necessity of the people.

As a result, the knowledge of ethical practices can stop you from making bad decisions due to ignorance it is important to study ethics in school. Therefore, option (b) is correct.

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Monty Corporation owns machinery that cost $26,400 when purchased on July 1, 2017. Depreciation has been recorded at a rate of $3,168 per year, resulting in a balance in accumulated depreciation of $11,088 at December 31, 2020. The machinery is sold on September 1, 2021, for $13,860. Prepare journal entries to (a) update depreciation for 2021 and (b) record the sale.

Answers

Answer:

a

Depreciation Expense $2,112 (debit)

Accumulated Depreciation  $2,112 (credit)

b.

Cash $13,860 (debit)

Accumulated Depreciation $13,200 (debit)

Machinery at Cost $26,400 (credit)

Profit and loss $660 (credit)

Explanation:

a.

2021 Depreciation Expense calculation

Depreciation Expense = $3,168 × 8 /12

                                      = $2,112

Therefore total accumulated depreciation will be :

Accumulated depreciation = $11,088 + $2,112

                                             = $13,200

b.

The following happen when the asset is sold :

Derecognize the cost of assetDerecognize the accumulated depreciation of the assetRecognize the proceeds from saleRecognize the profit or loss on the sale of the asset.

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