If Treasury bills are currently paying 5.1 percent and theinflation rate is 2.2 percent, what is the approximate real rate ofinterest? The exact real rate? Settlement date? Maturity date?Annual coupon rate? Coupons per year? face value (% of par)? bondprice (% of par)?
If Treasury bills are currently paying 5.1 percent and theinflation rate is 2.2 percent, what is the approximate real rate ofinterest? The exact real rate? Settlement date? Maturity date?Annual coupon rate? Coupons per year? face value (% of par)? bondprice (% of par)?
Related questions
| Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of â¬1,000, 20 years to maturity, and a coupon rate of 6.6 percent paid annually. |
| If the yield to maturity is 7.7 percent, what is the current price of the bond? |
Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
What is the amount of each semiannual interest payment for these bonds?
How many semiannual interest payments will be made on these bonds over their life?
Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium.
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Compute the price of the bonds as of their issue date.
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Prepare the journal entry to record the bondsâ issuance.
1- Record the issue of bonds with a par value of $800,000 for cash.
[The following information applies to the questions displayed below.]
The equity sections from Atticus Groupâs 2016 and 2017 year-end balance sheets follow.
| Stockholdersâ Equity (December 31, 2016) | ||
| Common stockâ$5 par value, 100,000 shares authorized, 35,000 shares issued and outstanding | $ | 175,000 |
| Paid-in capital in excess of par value, common stock | 135,000 | |
| Retained earnings | 340,000 | |
| Total stockholdersâ equity | $ | 650,000 |
| Stockholdersâ Equity (December 31, 2017) | |||
| Common stockâ$5 par value, 100,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury | $ | 206,000 | |
| Paid-in capital in excess of par value, common stock | 190,800 | ||
| Retained earnings ($30,000 restricted by treasury stock) | 400,000 | ||
| 796,800 | |||
| Less cost of treasury stock | (30,000 | ) | |
| Total stockholdersâ equity | $ | 766,800 | |
The following transactions and events affected its equity during year 2017.
| Jan. | 5 | Declared a $0.50 per share cash dividend, date of record January 10. | ||
| Mar. | 20 | Purchased treasury stock for cash. | ||
| Apr. | 5 | Declared a $0.50 per share cash dividend, date of record April 10. | ||
| July | 5 | Declared a $0.50 per share cash dividend, date of record July 10. | ||
| July | 31 | Declared a 20% stock dividend when the stockâs market value was $14 per share. | ||
| Aug. | 14 | Issued the stock dividend that was declared on July 31. | ||
| Oct. | 5 | Declared a $0.50 per share cash dividend, date of record October 10. |
Problem 13-4A Part 1
Required:
1. How many common shares are outstanding on each cash dividend date?
The following information applies to the questions displayed below.]
The equity sections from Atticus Groupâs 2016 and 2017 year-end balance sheets follow.
| Stockholdersâ Equity (December 31, 2016) | ||
| Common stockâ$5 par value, 100,000 shares authorized, 35,000 shares issued and outstanding | $ | 175,000 |
| Paid-in capital in excess of par value, common stock | 135,000 | |
| Retained earnings | 340,000 | |
| Total stockholdersâ equity | $ | 650,000 |
| Stockholdersâ Equity (December 31, 2017) | |||
| Common stockâ$5 par value, 100,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury | $ | 206,000 | |
| Paid-in capital in excess of par value, common stock | 190,800 | ||
| Retained earnings ($30,000 restricted by treasury stock) | 400,000 | ||
| 796,800 | |||
| Less cost of treasury stock | (30,000 | ) | |
| Total stockholdersâ equity | $ | 766,800 | |
The following transactions and events affected its equity during year 2017.
| Jan. | 5 | Declared a $0.50 per share cash dividend, date of record January 10. | ||
| Mar. | 20 | Purchased treasury stock for cash. | ||
| Apr. | 5 | Declared a $0.50 per share cash dividend, date of record April 10. | ||
| July | 5 | Declared a $0.50 per share cash dividend, date of record July 10. | ||
| July | 31 | Declared a 20% stock dividend when the stockâs market value was $14 per share. | ||
| Aug. | 14 | Issued the stock dividend that was declared on July 31. | ||
| Oct. | 5 | Declared a $0.50 per share cash dividend, date of record October 10. |
Problem 13-4A Part 2
2. What is the total dollar amount for each of the four cash dividends?
