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Alenkinab [10]
2 years ago
9

Jane Thorpe has been offered a seven-year bond issued by Barone, Inc., at a price of 943.22. The bond has a coupon rate of 9 per

cent and pays the coupon semiannually. Similar bonds in the market will yield 10 percent today. Should she buy the bonds at the offered price
Business
1 answer:
Lapatulllka [165]2 years ago
4 0

Answer:

Yes

Explanation:

Given:

  • F = 1000$
  • n = 7
  • Coupon rate = 9%, because  it pays the coupon semiannually, so

=> Coupon payment = 1000*9%/2 = 45

  • Current market rate, YMT=  10%

So the current value of bond is:

C(1- (1+r)^(-n)/r + F/((1+r)^{n}

<=>45(1 - (1+0,1)^(-7/0.1)) + 1000(1+0,1)^7

<=> C = $951

So she will buy the bonds at the offered price 943.22 because it is smaller than $951

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3 0
2 years ago
Based on its growth prospects, a private investor values a local bakery at $750,000. She believes that cost savings having a pre
julia-pushkina [17]

Answer:

the maximum that paid to acquire bakery is $336,672.

Explanation:

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astraxan [27]

Answer:

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Only in the case there was property loss, restitution plays like a grant there will be a compensation for the damages. If there are not significant damages or if no monetary pact was signed in a contract, there is no reason why a plaintiff should ask for restitution.

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