Business, 19.07.2019 05:00 AdanNava699

If $1,000,000 of 8% bonds are issued at 102¾, the amount of cash received from the sale is

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Answer from: 666isabella666

Cash received from the sale is $ 2,567,200

8% Bonds of $ 1,000,000 are $ 80,000

102¾ is 32.09

and then $ 80,000 x 32.09 = $ 2,567,200

Further explanation

One of the advantages of bonds is that the period of investment varies, the interest rate is stable and the risk is quite small.

Therefore, we will now try to discuss how the bond interest calculation.

Bonds are:

Long-term debt instruments issued with a certain nominal value by an institution with a certain maturity.

Types of bonds Bonds with collateral are bonds issued by companies using the collateral of an asset. Unsecured bonds are bonds issued by companies without certain collateral/assets. Convertible bonds are bonds that give the holder the right to exchange these bonds with a number of shares in the company at a price agreed upon in advance. Bonds without coupons are types of bonds that provide direct interest payments.

To find out how the four bond instruments are calculated, see the explanation below.

Nominal Yield

How to calculate the nominal yield is:

Coupon Rate = Interest Income: Nominal Value.

Current Yield

How to calculate the current yield is:

Current Yield = Annual Interest Income: Bond Market Price

Yield to Maturity (YTM)

Here's how to calculate YTM:

YTM = INT + ((M-PV) / n) / ((M + PV) / 2)

Information:

INT = Coupon Value

M = Maturity value / par value

PV = Current bond price

N = The length of time the bond is due

Yield to Call (YTC)

For YTC calculations are as follows:

YTC = (Annual Interest + ((Call Price-Market Price) / Number of Years to Call)) / ((Call Price + Market Price) / 2)

Information:

P = Current Bond Price

Number of years to call = the number of years up to the nearest yield to call

Annual interest = coupon income per year

Call Price = call price of a bond

Realized Yield

Realized yield is the rate of return that an investor expects from a bond. In addition, realized yield can be used to estimate the level of return that an investor can obtain using a trading strategy.

Learn more

Bonds

Sales Profit

Details

Class: college

Subject: Business

Keywords: profit, sales, bonds

Answer from: Quest

Answer the correct answer is price ceiling;

Answer from: Quest

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If $1,000,000 of 8% bonds are issued at 102¾, the amount of cash received from the sale is...

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