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coupon rate of 7.6%

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Question

One bond has a coupon rate of 7.6%, another a coupon rate of 9.3%. Both bonds pay interest annually, have 14-year

maturities, and sell at a yield to maturity of 8.0%.

a.If their yields to maturity next year are still 8.0%, what is the rate of return on each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.)
 Rate of return  
  Bond 1%  
  Bond 2%  
b.Does the higher-coupon bond give a higher rate of return?
  
 Yes
One bond has a coupon rate of 7.6%, another a coupon rate of 9.3%. Both bonds pay interest annually, have 14-year maturities, and sell at a yield to maturity of 8.0%. a.If their yields to maturity next year are still 8.0%, what is the rate of return on each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.)  Rate of return    Bond 1%    Bond 2%   
 
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A 10-year Treasury bond

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Question

A 10-year Treasury bond is issued with face value of $1,000, paying interest of $66 per year. If market yields

increase shortly after the T-bond is issued, what is the bond’s coupon rate?

 
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workJohnson Electronics

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Question

19) please show workJohnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $136,000 if credit is extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 4 percent of sales, and production and selling costs will be 71 percent of sales. The firm is in the 35 percent tax bracket.  
a.Compute the incremental income after taxes.    Incremental income after taxes$     b.What will Johnson’s incremental return on sales be if these new credit customers are accepted? (Input your answer as a percent rounded to 2 decimal places.)    Incremental return on sales %  
c.If the accounts receivable turnover ratio is 3 to 1, and no other asset buildup is needed to serve the new customers, what will Johnson’s incremental return on new average investment be? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)    Incremental return on new average investment%  

 
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Henderson Office Supply

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Question

20)
Henderson Office Supply is considering a more liberal credit policy to increase sales, but expects that 7 percent of the new accounts will be uncollectible. Collection costs are 5 percent of new sales, production and selling costs are 78 percent, and the accounts receivable turnover is five times. Assume income taxes of 30 percent and an increase in sales of $69,000. No other asset buildup will be required to service the new accounts.  a.What additional investment in accounts receivable is needed to support this sales expansion?    Incremental accounts receivable$     
 b.What would be Henderson’s incremental aftertax return on investment? (Input your answer as a percent rounded to 2 decimal places.)      Return on incremental investment %    c.Should Henderson liberalize credit if a 15 percent aftertax return on investment is required?    YesNo  Assume that Henderson also needs to increase its level of inventory to support new sales and that the inventory turnover is three times.  
 d.What would be the total incremental investment in accounts receivable and inventory needed to support a $69,000 increase in sales?    Total incremental investment$     
 e.Given the income determined in part b and the investment determined in part d, should Henderson extend more liberal credit terms?    YesNo

 
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