Four years after the issue of a $10,000, 8.1%coupon, 20-year bond, the rate of return required inthe bond market on long-term bonds was 6.4%compounded semiannually.b. What capital gain or loss (expressed in dollars)would the original owner have realized by sellingthe bond? (Do not round intermediate calculations.Round your answer to 2 decimal places.)Capital(Click to select) gain loss of $

Capital gain refers to an amount that is being earned by a company by selling the assets having…

Answered: Four years after the issue of a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Give typing answer with explanation and conclusion Four years after the issue of a $10,000, 8.9% coupon, 20-year bond, the rate of return required in the bond market on long-term bonds was 7.2% compounded semiannually. b. What capital gain or loss (expressed in dollars) would the original owner have realized by selling the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Capital (Click to select) of $
3. Assume you purchased a bond for $9,186. The bond pays $300 interest every six months. You sell the bond after 18 months for $10,000. Calculate the following: a. Income. b. Capital gain (or loss). c. Total return in dollars and as a percentage of the original investment. Review Only Click the icon to see the Worked Solution. a. The current income is $ (Round to the nearest dollar.) b. The capital gain (or loss) is $ (Enter a loss as a negative number and round to the nearest dollar.) c. The total return in dollars is $ (Round to the nearest dollar.) The total return as a percentage of the original investment is %. (Enter as a percentage and round to two decimal places.)
Four years after the issue of a $10,000, 8.9% coupon, 20-year bond, the rate of return required in the bond market on long-term bonds was 7.2% compounded semiannually.What capital gain or loss (expressed in dollars) would the original owner have realized by selling the bond?
Mini Lop, Inc. paid $350,000 to retire a bond with a face value of $300,000. The note was issued with an 8% coupon rate paid semi-annually. The note was four years from maturity and had a carrying amount of $340,000. What is the net gain or loss on the redemption of the note? Group of answer choices a. $50,000 loss b. $40,000 loss c. $40,000 gain d. $10,000 loss e. The provided answers are incorrect
A) You invest OMR 900 in a bond which gives 9% interest over a period of 2 years, the compounding is done quarterly. How much will be the value of the investment? Select one: a. 1053.24 b. 1254.74 c. 1075.34 d. 753.24 B) Which of the statements are not correct Select one: a. Profits refers to earnings before Interest and Taxes b. Investment decisions relate to pattern of financing c. Dividend pay out ratio refers to what proportion is paid to shareholders d. Borrowed funds are relatively cheaper than shareholders’ funds
Three years ago, Petty Partners Inc. issued 15-year, $1,000 bonds that are currently priced at $911.37. If the prevailing rate of return on similar investments is 5%, what is the annual interest payment of Petty Partners bonds ? Please answer fast i give you upvote.
Assume that three years ago, you purchased a corporate bond that pays 6.50 percent. The face value of the bond was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 7.00 percent. (a) What is the annual dollar amount of interest that you receive from your bond investment? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Annual interest (b) Assuming that comparable bonds are paying 7.00 percent, what is the approximate dollar price for which you could sell your bond? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Approximate bond price
Current Attempt in Progress × Your answer is incorrect. Marin Inc. issues $2,100,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest fo bonds of similar risk is 9%. Click here to view factor tables. What amount will Marin receive when it issues the bonds? (For calculation purposes, use 5 decimal places as displayed in the factor tabl provided and final answer to O decimal places, e.g. 458,581.)
Classify the following investments. Each case is independent of the other. Investment Classifications (a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is expected next month, it will be sold. select an Investment Classification *Available-for-Sale Debt Securities *Held-to-Maturity Debt Securities *Trading Debt Securities *None of the above (b) 10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventually getting a total of 30% of its outstanding stock. select an Investment Classification *Available-for-Sale Debt Securities *Held-to-Maturity Debt Securities *Trading Debt Securities *None of the above (c) Bonds were purchased in December of this year. The bonds are expected to be sold in January of next year. select an Investment Classification *Available-for-Sale Debt Securities…
(b) An investor invested his wealth into three bonds for 7 years. The following table shows the market data of these three bonds: Market Price Modified Convexity 11.77 Macaulay Duration Bond A 93.26 3.19 108.04 6.19 44.57 Bond B Bond C 105.91 8.52 83.11 The term structure is assumed to be flat and the annual effective interest rate is currently 3.2%. Suppose that the investor has $50000 initially and he invests 40% of capital in bond A, 25% of capital in Bond B and 35% in bond C. Estimate the IRR of the bond investment if the future interest rate becomes i = 4%.
Cross Country Railroad Co. is about to issue $100,000 of 10-year bonds that pay a 5.5% annual interest rate, with interest payable semi-annually. The market interest rate is 5%. How much can Cross Country expect to receive for the sale of these bonds? To calculate, use (a) the present value tables, (b) a financial calculator, or (c) Excel function PV. (Unknown Rate) HQ Ltd. purchased a used truck from Trans Auto Sales Inc. HQ paid a $4,000 down payment and signed a note that calls for 36 payments of $1,033.34 at the end of each month. The stated rate of interest in the note is 4%. As an incentive for entering into the contract, Trans has agreed to forgive the first two payments under the lease.InstructionsWhat was the purchase price of the used truck excluding the incentive given? To calculate, use (1) a financial calculator or (2) Excel function PV.What effect, if any, does the forgiveness of the first two payments have on the purchase price of the truck?Calculate the present value of…
‘An investor purchased the following five bonds. Each bond had a par value of $1,000 and a 11% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 7%, What is thepercentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers to the nearest cent and percentage answers totwo decimal places. Price @ 11% Price @ 7% Percentage Change10-year, 10% annual coupon $ $ %10-year zeroS-year zero 30-year zero$100 perpetuity

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