Bond valuation with semi-annual payments: renfro rentals has issued bonds that have a 10% coupon rate, payable semiannually. the bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. what is the price of the bonds?

The current Price of the bond will be 1,006.20

Explanation:

We have to calculate the present value of the bonds cash flows at a 8.5% rate

Present value ofthe interest service:

PV = $563.9183

Present Value of the principal

PV = $422.2854

Now we sum both concepts

422.2854 + 563.9183 = 1006.2037 = 1,006.20

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.