the coupon interest rate is 8%‚ and the yield to maturity is 9%. What is the bond’s current market price? PV factor of sum = (1+i)^-n = (1+9%)^-10 =1.09^-10 = 0.4224 PV factor of annuity = 1 - (1+i)^-n / i = 1 - (1+9%)^-10 / 9% = 1 - 0.4224 / 9% = 0.5775 / 9% = 6.417 = PV factor of Sum * Par Value + PV factor of annuity * coupon payment = 0.4224 * 1‚000 + 6.417 * 80 = 422.4 + 513.3 = 935.76 2. An investor has two bonds in his portfolio that have a face value of $1‚000 and pay a 10% annual coupon
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------------------------------------------------- ACC/421 Sample Final Examination This Sample Examination represents the Final Examination that students complete in Week Five. As in the following Sample Examination‚ the Final Examination includes questions that assess the course objectives. Although the Sample Examination includes one question per objective‚ the Final Examination includes three questions per course objective. Refer to the questions in the following Sample Examination
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Models for Life Contingencies SPRING 2014 Important Exam Information: Exam Date and Time A read-through time of 15 minutes will be given prior to the start of the exam. Exam Registration Candidates may register online or with an application. Introductory Study Note The Introductory Study Note has a complete listing of all readings as well as errata and other very important information. Past Exams There are no past exams for the new version of this examination. Past exams
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example‚ the cost of purchasing the oxen divided by their expected life yielded the yearly depreciation amount applied for the oxen. Due to the death of Sihathor’s worker‚ he granted the worker’s widow an annuity of one sack of corn per lunar cycle for the rest of her life. The present value of this annuity was 95 sacks of corn‚ which
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must you wait until your account has grown to $3‚600? 5. You need $75‚000 in 10 years. If you can earn 0.55 percent per month‚ how much will you have to deposit today? 6. If you put up $20‚000 today in exchange for a 8.5 percent‚ 12-year annuity‚ what will the annual cash flow be? 7. Bath ’s Bank offers you a $50‚000‚ seven-year term loan at 8 percent annual interest. What will your annual loan payment be? 8. Curly ’s Life Insurance Co. is trying to sell you an investment policy
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of the money to invest into his company thus making it a business expense which lowers your overall tax liability. If John has the option of collecting his fee on an annuity basis along with his client he could reduce his current income and his tax liability. He would also create a guaranteed income for his company for the annuity period creating a more desirable company as a whole thus lowing future debt
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www.virtualinspire.com ACC501 Current 11 Solved Finalterm Papers and Important MCQS Solved… By EXAMINATION Question No: 1 ( Marks: 1 ) - Please choose one The accounting definition of income is: ►Income = Current Assets -Current Liabilities ►Income = Fixed Assets - Current Assets ►Income = Revenues - Current Liabilities ►Income = Revenues - Expenses pg 17 Question No: 2 ( Marks: 1 ) - Please choose one What would be the capital spending for an organization who has purchased fixed assets
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PRINCIPLES OF MANAGERIAL FINANCE TWELFTH EDITION LAWRENCE J. GITMAN SAN DIEGO STATE UNIVERSITY PEARSON Prentice Hall Boston San Francisco New York London Toronto Sydney Tokyo Singapore Madrid Mexico City Munich Paris Cape Town Hong Kong Montreal Contents Preface xxxi Revised Content xxxiii Supplements to the Twelfth Edition Acknowledgments To the Student xxxvii xl xliii Part One Introduction to Managerial Finance 1 Chapter 1 The Role and Environment of Managerial Finance page 2
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LECTURE NOTES 1 : INVESTMENTS by: Ms. Hazel M. Sarmiento Investments are assets not directly identified with the entity’s normal operating activities but are nonetheless acquired to: 1) generate income on idle cash; 2) exercise significant influence or control over another entity; 3) establish long-term relationships with suppliers and creditors; 4) accumulate funds for future use; 5) benefit from capital appreciation; or 6) protect from possible future risks. I. Investments
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M Sc Strategic Management Tutorials Long term Debt Finance Questions and Answers Using present value to value bonds A bond‚ from the perspective of the person issuing the bond is a form of long term debt. In the hands of the person who has acquired the bond it is an asset. The agency issuing the bond agrees to pay a fixed sum of money to the holder of the bond for a period of years and then‚ at the end of that period‚ to pay back the face value of the bond. Bonds can be issued
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