Business, 22.04.2021 16:10 ayoismeisalex

Suppose you own a 30-year bond issued by CQ Telecommunications with a face value of $1,000 paying a semiannual coupon interest rate of 6% that has 10 years remaining until maturity. If interest rates in the general economy jump to 8% after one year, no one will want to buy your 6% bond for $1,000, because it pays only $ per year in interest. If you want to sell the bond, then the bond price will have to be . If rates on similar bonds are now at 8%, then the discount rate is 8% (or 4% twice a year for 20 payments). The task is to calculate the present value of the interest payments and the repayment lump sum. To do so, use Appendix A-2 and Appendix A-4 in your textbook. Find the column for 4% interest and the row for 20 periods. (The number of periods, n, is equal to 20, because there are 20 semiannual interest payments in the remaining 10 years until the bond matures.) You can use the following equation to determine the value of a bond (or bond selling price):

Answers: 1

Show answers

Other questions on the subject: Business

Business, 21.06.2019 12:30, alexisfaithsmith

Carolyn has a 50 percent interest in a general partnership that has a $14,000 loss for the year. she materially participates in the partnership. her basis in the partnership is $10,000. she also has salary from other employment of $46,000. if she is single, has no dependents, and claims the standard deduction, what is her taxable income and her tax liability in 2017

Answers: 3

continue

Business, 22.06.2019 07:30, SophomoreSareke

Which of the following is an example of an unsought good? a. cameron purchases a new bike. b. jordan buys paper towels. c. taylor buys cupcakes from her favorite bakery. d. riley buys new windshield wipers for her car.

Answers: 3

continue

Business, 22.06.2019 08:30, isaicruz2018

Which actions can you improve your credit score? (multiple can be selected)having a good credit score should be your prime objective as credit companies analyze your creditworthiness before giving you a loan. there are certain guidelines you can follow to ensure you have a good credit score. always pay your mortgage interest on time. if you are a student, make student loan inquiries before taking any loan. if you have multiple credit cards, manage them judiciously. maintain a healthy balance in your bank account.1. always pay your mortgage interest on time.2. if you are a student, make student loan inquiries before taking any loan.3. if you have multiple credit cards, manage them judiciously.4. maintain a healthy balance in your bank account.

Answers: 1

continue

Business, 22.06.2019 20:00, pickelswolf3036

On january 1, year 1, purl corp. purchased as a long-term investment $500,000 face amount of shaw, inc.’s 8% bonds for $456,200. the bonds were purchased to yield 10% interest. the bonds mature on january 1, year 6, and pay interest annually on january 1. purl uses the effective interest method of amortization. what amount (rounded to nearest $100) should purl report on its december 31, year 2, balance sheet for these held-to-maturity bonds?

Answers: 1

continue

You know the right answer?

Suppose you own a 30-year bond issued by CQ Telecommunications with a face value of $1,000 paying a...