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Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and par value of $1,000. The yield-to-maturity for this bond is 10%. a. What is the price of the bond if the bond matures in 5, 10, 15, or 20 years? b. What do you notice about the price of the bond in relationship to the maturity of the bond? A. Five years to maturity INPUT 10 5 40.00 1000.00 KEYS N I/Y PV PMT FV CPT -922.78 Ten years to maturity INPUT 20 5 40.00 1000.00 KEYS N I/Y PV PMT FV CPT -875.38 Fifteen years to maturity INPUT 30 5 40.00 1000.00 KEYS N I/Y PV PMT FV CPT -846.28 Twenty years to maturity INPUT 40 5 40.00 1000.00 KEYS N I/Y PV PMT FV CPT -828.41 B. The lengthier the maturity of a bond selling at a reduction, all else held persistent, the lesser the price of the bond! Part B: The Crescent Corporation just paid a dividend of $2 per share and is expected to continue paying the same amount each year for the next 4 years. If you have a required rate of return of 13%, plan to hold the stock for 4 years, and are confident that it will sell for $30 at the end of 4 years, how much should you offer to buy it at today? In this scenario we have an annuity of $2.00 for 4 year periods, followed by a lump sum of 30 to be discounted at 13% for respective number of 4 years: the answer should be -24.35 Part C: Use the information in the following table to answer the questions below. State of Economy Probability of State Return on A in State Return on B in State Return on C in State Boom .35 0.040 0.210 0.300 Normal .50 0.040 0.080 0.200 Recession .15 0.040 -0.010 -0.260 xxxxxxxx x xxxxxxxx 2 Present Value Annuity xxxxxx (PVAF xxx xxx = (1 - 1/1.0625) / 0.06 x xxxxxxx Price x xxxxxxx xxxxx x $500 x 12.7834 x xxxxxxxxx xxxxxxxxx = $30,000 x [(1 - xxxxxxxxxxxx / 0.085] x $30,000 / xxxxxx = $4,572.23 a. What is the expected return of each asset? b. What is the variance of each asset? c. What standard deviation of each asset?
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Transactions occur during the month of July.
An accounting firm, provides consulting and tax planning services. A recent analysis found that 55% of the firm's billable hours to clients resulted from tax planning and for many years, the firm's total administrative cost (currently $270,000) ha..
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there are four main methods for documenting specific business processes systems and so on. if your company asked you to
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Estimate purchases for April and May and estimate the cash required to make purchases in April and May.
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