Business, 24.03.2020 21:20 jamerica0

Sure Tea Co. has issued 4.8% annual coupon bonds that are now selling at a yield to maturity of 5.50% and current yield of 5.4861%. What is the remaining maturity of these bonds? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Answers: 1

Show answers

Answers

Answer from: tmrodriguez1

The remaining maturity of these bonds is 76 years.

Explanation:

Where the face value of the bond is not specified, it is typically assumed as $1000. Hence,

Face value = $1000

Annual coupon payment = Face value x Annual coupon rate

= $1000 x 4.8%

= $48

Current yield = Annual coupon payment / Current price

Hence, Current price = Annual coupon payment / Current yield

= $48 / 5.4861%

= $874.938

Time to maturity = NPER (0.055, 48, -874,938, 1000,0)

= 76

Therefore, the remaining maturity of these bonds is 76 years.

Answer from: enevjordan

The period to maturity is 76 years

Explanation:

In order to calculate the remaining maturity period for the bond, the current price-the present value of the bond, is required and it calculated thus:

the current price of the bond =periodic coupon/current yield of the bond

periodic coupon is 4.8%* par value

standard par value is $1000

coupon =$1000*4.8%

=$48

current yield is 5.4861%

the current price of the bond=$48/5.4861%

=$874.94

The remaining maturity is computed thus:

nper(rate,pmt,-pv,fv)

where nper is the period to maturity

rate is 5.5% rate to maturity

pmt is $48

pv is $874.94

fv is $1000

=nper(5.5%,48,-874.94,1000)

=75.68

nper=period to maturity=76 years

Find attached excel file as well

Answer from: Quest

If its a multiple choice test, then it should be a conservationist.

Answer from: Quest

answer; by looking at total product,marginal product,and changes in both after changes in inputs

Another question on Business

Business, 20.06.2019 18:02

Characteristics of good and bad drivers related to health care cost allocation

Answers: 3

Answer

Business, 22.06.2019 04:30

Jennifer purchased a house in a brand new development in the outskirts of town. when her house was built, the nearest fire department was nearly 20 miles away. as her neighborhood developed, the density of the community called for a new fire department 1.5 miles away. what effect will the new fire station have on her homeowners insurance premium? a. a new fire department will be more demanding on local taxes. her annual premium will go up. b. the location of a fire department has no bearing on the value of her house. her annual premium will stay the same. c. the new fire department will reduce the risk of financial loss in her home. her annual premium should decrease. d. with a fire department so close (less than 5 miles), financial risk on jennifer’s home practically disappears. she will not need to pay insurance anymore.

Answers: 1

Answer

Business, 22.06.2019 10:30

The rybczynski theorem describes: (a) how commodity price changes influence real factor rewards (b) how commodity price changes influence relative factor rewards. (c) how changes in factor endowments cause changes in commodity outputs. (d) how trade leads to factor price equalization.

Answers: 1

Answer

Business, 22.06.2019 18:30

Afarmer is an example of what kind of producer?

Answers: 2

Answer

You know the right answer?

Sure Tea Co. has issued 4.8% annual coupon bonds that are now selling at a yield to maturity of 5.50...

Questions