Lyons Document Storage Corporation: Bond Accounting In December 2008 Rene Cook sat in her cubicle trying to remember what she had learned in business school about bonds and bond accounting. Ms. Cook‚ a new MBA and special assistant in a training assignment with the company president‚ had just met with David Lyons‚ president of Lyons Document Storage Corporation. He had asked her to think about the possible consequences of repurchasing company bonds outstanding using cash that he felt could
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Allie measured her foot and it was 21cm long‚ and then she measured her Mother’s foot‚ and it was 24cm long. "I must have big feet‚ my foot is nearly as long as my Mom’s!" But then she thought to measure heights‚ and found she is 133cm tall‚ and her Mom is 152cm tall. In a table this is: Allie Mom Length of Foot: 21cm 24cm Height: 133cm 152cm The "foot-to-height" ratio in fraction style is: Allie: 21 133 Mom: 24 152 So the ratio for Allie is 21 : 133 By dividing both values by 7 we get 21/7
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BONDS Bonds pay fixed coupon (interest) payments at fixed intervals (usually every six months) and pay the par value at maturity. Par value = $1‚000 Coupon = 6.5% or par value per year‚ or $65 per year ($32.50 every six months). Maturity = 28 years (matures in 2032). Issued by AT&T. Types of Bonds Debentures - unsecured bonds. Subordinated debentures - unsecured “junior” debt. Mortgage bonds - secured bonds. Zeros - bonds that pay only par value at maturity; no coupons. Junk bonds - speculative or
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activities of the corporation are entrusted to them. Guaranteed Stocks-Stock of corporation wherein the payment of dividends is guaranteed by another corporation. Debenture Stock- not stock in the real sense‚ but a debt issue similar to debenture bonds. They are fixed interest securities issued by limited
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NERISSA BRAVANTE RAMASTA Objective - To be able to find a job that will further enhance my knowledge and to contribute as an individual for the improvement of the company and the economy. Summary of Qualifications Highly organized and detail-focused individual with an exceptional track record of accurately handling accounting‚ cashiering‚ inventory management‚ retail management and operational efficiency. Skilled in all aspects of managing and reconciling accounts and ensuring it’s
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5-1 Bond Valuation with Annual payments Jackson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually‚ the bonds have a $1‚000 par value‚ and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds? F= par value C= maturity value R= coupon rate per coupon payment period I= effective interest rate per coupon payment period N= number of coupon paynments F= 1000 so C should = 1000 r= .08 i=
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10 Bond Prices and Yields 1. a. Catastrophe bond: Typically issued by an insurance company. They are similar to an insurance policy in that the investor receives coupons and par value‚ but takes a loss in part or all of the principal if a major insurance claim is filed against the issuer. This is provided in exchange for higher than normal coupons. b. Eurobond: They are bonds issued in the currency of one country but sold in other national markets. c. Zero-coupon bond: Zero-coupon bonds are
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wish to improve control over cash disbursements use a voucher system. ANS: T PTS: 1 4. In a voucher system‚ the sum of all unpaid vouchers in the voucher register equals the firm’s total voucher payable balance. ANS: T PTS: 1 5. The accounts payable department reconciles the accounts payable subsidiary ledger to the control account. ANS: F PTS: 1 6. The use of inventory reorder points suggests the need to obtain specific authorization. ANS: F PTS: 1 7. Proper segregation of
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Assignment no. 1 Fixed Income Securities and Markets Question A.1 Given the following bond: |starting date |30/09/2011 | |maturity date |30/09/2014 | |coupon rate |4.00% | |coupon frequency |annual | |day count |act/act | |nominal value |100 | a) Calculate the price of the security on
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is settled on day 210? 2. Using information in Table 7.1‚ complete the following: (a) Given the zero-coupon bond prices‚ compute the implied forward rates from time 1 to time 2‚ time 2 to time 3 and time 1 to time 3. (b) Calculate the implied coupon rate of a 2-year par coupon bond that will be issued at time 1. 3. Suppose the coupon rates for 1-year‚ 2-year‚ and 3-year par coupon bonds are 5%‚ 5.97%‚ and 6.91%‚ respectively. (a) Compute the implied effective annual forward rate between year 1
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