Respuesta :
If $1,000,000 of 8% bonds are issued at 102¾, the amount of cash received from the sale is $1,027,500. To solve ($1,000,000 x 0.08 x 1023/4) : $1,027,500.
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 https://brainly.com/question/10231518
Sales Profit https://brainly.com/question/10231518
Details
Class: college
Subject: Business
Keywords: profit, sales, bonds
