Homework Answers
Calculation of price to be paid:
Price to be paid= amount/discount rate
Price to be paid= 75/0.08= 937.50
So correct answer is $937.50
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Question 30 1 pt: You are to receive $75 payments indefinitely. The market rate of interest...
Face Value $500,000 Coupon Rate 5.0% Market Rate 4.0% Semiannual Interest Payments Due June 30 and...
Face Value $500,000 Coupon Rate 5.0% Market Rate 4.0% Semiannual Interest Payments Due June 30 and Dec 31 Maturity Date 5 years Issue Date Jan.1 Based on the data above, complete the journal entries for: The issue of the bonds on January 1 The payment of interest and amortization of the premium on June 30 and the payment of interest and amortization of the premium on December 31 Date General Journal Debit Credit 1/1 6/30 12/31 Face Value $200,000 Coupon...
You will receive 100 British bonds that pay interest forever. The amount of annual interest payments...
You will receive 100 British bonds that pay interest forever. The amount of annual interest payments that you we ece ve is S5.000. If you could invest yOur money at 4.25%, how much are these bonds worth today? O A $55,000 B. $197,250 C. $250,000 O D. $117.647 ? E. $64,480 are considering the purchase of XYZ Company's common stock which will pay a $1.00 per share dividend one year from the date of purchase. The divid end is expected...
This Question: 1 pt 18 of 30 (10 complete) If the real interest rate relevant to...
This Question: 1 pt 18 of 30 (10 complete) If the real interest rate relevant to a bank account is 5 percent and the expected inflation rate is 4 percent, then after one year, a person expects to have O A m ore dollars in the bank account which will purchase 4 more goods OB. 4% more of everything C. none of the above OD 5% more dollars in the bank account, which will purchase 4% more goods O E...
Question #2 50,000 per You would like to setup a series of fixed payments where you...
Question #2 50,000 per You would like to setup a series of fixed payments where you will receive S year for 20 years. You would like this series of fixed payments to begin at the end o year 5. If the current interest rate for fixed payments is 6%, what is t have to pay today? What is the definition of this type of arrangement? he price you will Price of the arrangement: Definition of this arrangement:
Question 4 On June 30, 2016, the market interest rate is 7%. Starship Enterprises issues $500,000...
Question 4 On June 30, 2016, the market interest rate is 7%. Starship Enterprises issues $500,000 of 8%, 20-year bonds at 110.625. The bonds pay interest on June 30 and December 31. Starship amortizes bonds by the effective-interest method. Record issuance of the bonds on June 30, 2016, the payment of interest at December 31, 2016, and the semi-annual interest payment on June 30, 2017.
Question 4 On June 30, 2016, the market interest rate is 7%. Starship Enterprises issues $500,000...
Question 4 On June 30, 2016, the market interest rate is 7%. Starship Enterprises issues $500,000 of 8%, 20-year bonds at 110.625. The bonds pay interest on June 30 and December 31. Starship amortizes bonds by the effective-interest method. 1. Record issuance of the bonds on June 30, 2016, the payment of interest at December 31, 2016, and the semi-annual interest payment on June 30, 2017.
the interest rate increases, net present value: Increases Could increase or decrease Does not change Decreases...
the interest rate increases, net present value: Increases Could increase or decrease Does not change Decreases If you determine that the present value of a stream of payments is $20,000 and the immediate investment required to get that stream of payments is $28,000, do you make the investment? Dolphin's are friendly No Yes Need more information The intersection of the demand curve can be used to: Identify the economic value of the good or service exchanged Both of the above...
20. The current interest rate on the 1-year T-Bill is 4% (APR). The market expects that...
20. The current interest rate on the 1-year T-Bill is 4% (APR). The market expects that the Fed will raise the rate next year thus the expected 1-year T-Bill rate is 8% (APR). According to the expectation hypothesis, the current 2-year T-note should offer an interest rate of (APR). 1) 4% 2) 5% 3) 6% 4) 7% 5) 8% 21. You are bullish on a pharmaceutical stock. The stock is currently trading at $100 per share and you have $6,000...
Below is some data concerning the money market. Rate of Interest Asset Demand for Money $75...
Below is some data concerning the money market. Rate of Interest Asset Demand for Money $75 5% National income $740 720 700 680 660 6% 65 7% 8% 35. Refer to the information above to answer this question. If the transactions demand for money is 10 percent of national income and the supply of money is $135 then what would be the equilibrium interest rate? A) 4%. B) 5%. C) 6%. D) 7%. E) 8%. 36. Refer to the information...
On January 1, 2017, Tango-In-The-Night, Inc., issued $75 million of bonds with an 8% coupon interest...
On January 1, 2017, Tango-In-The-Night, Inc., issued $75 million of bonds with an 8% coupon interest rate. The bonds mature in 10 years and pay interest semi-annually on June 30 and on December 31 of each year. The market rate of interest on January 1, 2017, for bonds of this type was 8%. The company closes its books on December 31. Tango-In-The-Night elects the fair value option under ASU 2016-1. Ignore tax effects. Required: At what price were the bonds...
You will receive 100 British bonds that pay interest forever. The amount of annual interest payments that you we ece ve is S5.000. If you could invest yOur money at 4.25%, how much are these bonds worth today? O A $55,000 B. $197,250 C. $250,000 O D. $117.647 ? E. $64,480 are considering the purchase of XYZ Company's common stock which will pay a $1.00 per share dividend one year from the date of purchase. The divid end is expected...
This Question: 1 pt 18 of 30 (10 complete) If the real interest rate relevant to a bank account is 5 percent and the expected inflation rate is 4 percent, then after one year, a person expects to have O A m ore dollars in the bank account which will purchase 4 more goods OB. 4% more of everything C. none of the above OD 5% more dollars in the bank account, which will purchase 4% more goods O E...
Question #2 50,000 per You would like to setup a series of fixed payments where you will receive S year for 20 years. You would like this series of fixed payments to begin at the end o year 5. If the current interest rate for fixed payments is 6%, what is t have to pay today? What is the definition of this type of arrangement? he price you will Price of the arrangement: Definition of this arrangement:
Question 4 On June 30, 2016, the market interest rate is 7%. Starship Enterprises issues $500,000 of 8%, 20-year bonds at 110.625. The bonds pay interest on June 30 and December 31. Starship amortizes bonds by the effective-interest method. 1. Record issuance of the bonds on June 30, 2016, the payment of interest at December 31, 2016, and the semi-annual interest payment on June 30, 2017.
the interest rate increases, net present value: Increases Could increase or decrease Does not change Decreases If you determine that the present value of a stream of payments is $20,000 and the immediate investment required to get that stream of payments is $28,000, do you make the investment? Dolphin's are friendly No Yes Need more information The intersection of the demand curve can be used to: Identify the economic value of the good or service exchanged Both of the above...
20. The current interest rate on the 1-year T-Bill is 4% (APR). The market expects that the Fed will raise the rate next year thus the expected 1-year T-Bill rate is 8% (APR). According to the expectation hypothesis, the current 2-year T-note should offer an interest rate of (APR). 1) 4% 2) 5% 3) 6% 4) 7% 5) 8% 21. You are bullish on a pharmaceutical stock. The stock is currently trading at $100 per share and you have $6,000...
Below is some data concerning the money market. Rate of Interest Asset Demand for Money $75 5% National income $740 720 700 680 660 6% 65 7% 8% 35. Refer to the information above to answer this question. If the transactions demand for money is 10 percent of national income and the supply of money is $135 then what would be the equilibrium interest rate? A) 4%. B) 5%. C) 6%. D) 7%. E) 8%. 36. Refer to the information...
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