A bond price is $1,135.90. The maturity is 10 years. The coupon rate is 10%. Payments are semi-annual. Face value is $1,000. Solve for the YTM. Input your answer as whole percentage with two decimal places (x.xx), so 9.5% is input as 9.50.
Hint: first solve for the RATE by adjusting for semiannual again, then multiply this result by 2 to bring it back to annual. The PMT and FV have the same sign since they are inflows to the investor, while the PV has the opposite sign as an outflow from the investor when they buy the bond.
In: Finance
Ellis Company issues 8.0%, five-year bonds dated January 1,
2019, with a $600,000 par value. The bonds pay interest on June 30
and December 31 and are issued at a price of $651,181. The annual
market rate is 6% on the issue date.
Required:
1. Complete the below table to calculate the total
bond interest expense over the bonds' life.
2. Prepare a straight-line amortization table for
the bonds’ life.
3. Prepare the journal entries to record the first
two interest payments.
In: Accounting
2. What are the four major categories of mortgages and what percentage of the overall market does each entail?
18. Describe a collateralized mortgage obligation. How is a CMO created?
4. You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit union. The mortgage page 238rate offered to you is 5.25 percent. You will make a down payment of 20 percent of the purchase price.
Calculate your monthly payments on this mortgage.
Construct the amortization schedule for the first six payments.
In: Finance
Valese Inc. leased standard equipment to Linus Corporation with a lease period of 8 years. At the end of the lease Valese is to have possession of the equipment. Valese paid $16,000 for the equipment. The useful life of the equipment is 12 years. The normal sale price of the equipment is $22,500. The present value of the lease payments for the lessor and lessee is $20,500. The first payment was made the day the lease was signed. What are the five criterial for classification as a finance lease? Can Linus classify this as a finance lease? If yes, which criteria it met for a finance lease?
In: Finance
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The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $17.40 for each of the 20 million shares sold. The initial offering price was $19.50 per share, and the stock rose to $21.60 per share in the first few minutes of trading. Raven paid $600,000 in direct legal and other costs and $200,000 in indirect costs. |
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What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
In: Finance
In: Accounting
A widget-rationing program requires that anyone who buys widgets first pay a lump sum for a license; i.e. the consumer cannot buy widgets without a license. The license allows the consumer to buy any number of widgets at the controlled price. The proceeds from the sale of the licenses are used to reduce income taxes for widget buyers and non-buyers alike.
With widgets on the x-axis and income on the y-axis, draw the budget constraint before and after the imposition of the license for a consumer who does not buy a license.
In: Economics
The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $88.50. The variable cost per unit is $27.25, Poseidon Swim has average fixed costs per year of $5,216. Assume that current level of sales is 305 units. What will be the resulting percentage change in EBIT if they expect units sold to changes by-3.9 percent? (You should calculate the degree of operating leverage first). (Write the percentage sign in the "units" box). Round the answer to two decimal places
In: Finance
Topic: CONDUCTING MARKETING RESEARCH AND FORECASTING DEMAND Suppose the annual plan called for selling 34,000 widgets in the first quarter at $2 per widget, for total revenue of $68,000. At quarter's end, only 30,000 widgets were sold at $1.80 per widget, for total revenue of $54,000. Based on the Sales-variance analysis, how much of the sales performance is due to the price decline and how much to the volume decline? Note: Sales-variance analysis measures the relative contribution of different factors to a gap in sales performance.
In: Economics
Bahamas Inc. is experiencing rapid growth. The company expects dividends to grow at 15 % per year for the next 4 years before leveling off at 6% into perpetuity. The required return on the company's stock is 11 percent. The dividend per share just paid was $1.25. 1) calculate the current market value of Bahamas Inc.'s stock. 2) calculate the expected market price of the share in one year. 3) calculate the expected dividend yield and capital gains yield expected at the end of the first year.
In: Finance