any accountant here?

[eng2d2]

Just helping my daughter with just this one extra credit question? You dont have to give the answer but just throw us something so we can proceed.

On March 1, 2011, Catherine purchased $60,000 of Tyson Co.'s 6%, 17-year bonds at face value. Tyson Co. has regularly paid the annual interest due on the bonds. On March 1, 2016, market interest rates had risen to 10%, and Catherine is considering selling the bonds. Use present value tables

 

[shortylickens]

I SHOULD know how to do this.
But I dont.
Which makes me sad.

 

[BoomerD]

https://www.accountingcoach.com/present-value-of-an-ordinary-annuity/explanation/3

http://www.cimaglobal.com/Documents...rrer&utm_medium=banner&utm_campaign=p1samples

Those should get her started.

 

[eng2d2]

we have tried subtracting the years, we have calculated at 5 years. weve calculated 6% and 10%. we've have subtracted answers.we've tried various number associated with the years and percentages on the Factors for Calculating the Present Value of $1 Discount Rate

 

[rcpratt]

...is there even a question in there?

 

[s0me0nesmind1]

I SHOULD know how to do this.
But I dont.
Which makes me sad.

Same. I work amongst tons of CPA's - but I work on implementations of software that performs this shit to replace the accountants

 

[BoomerD]

I haven't cracked an accounting textbook since 2009, and I'm not gonna solve a problem for someone else's kid's homework...especially for an extra-credit question.

SOME things should actually require thought.

 

[Ns1]

Wtf is the question.

 

[MrRamon]

I found this on chegg. It's the same type of question but with different values for the variables. It looks like the present value tables should be in your book to reference for the question.

The annual interest on the bonds = 8% stated rate × $60,000 face amount = $4,800

The remaining term of the bonds is 15 years

The present value of an interest annuity of $4,800 for 15 years at 12% = $4,800 × 6.8109 = $32,692.32

The present value of the maturity value of $60,000 in 15 years at 12% = $60,000 × 0.1827 = $10,962.00

The market value of the bonds = PV of interest + PV of maturity value = $32,692.32 + $10,962.00 = $43,654.32

 

[eng2d2]

Calculate the market value of Catherine’s bonds on March 1, 2016.

 

[eng2d2]

The

I found this on chegg. It's the same type of question but with different values for the variables. It looks like the present value tables should be in your book to reference for the question.

The annual interest on the bonds = 8% stated rate × $60,000 face amount = $4,800

The remaining term of the bonds is 15 years

The present value of an interest annuity of $4,800 for 15 years at 12% = $4,800 × 6.8109 = $32,692.32

The present value of the maturity value of $60,000 in 15 years at 12% = $60,000 × 0.1827 = $10,962.00

The market value of the bonds = PV of interest + PV of maturity value = $32,692.32 + $10,962.00 = $43,654.32

Thanks Mrramon we are trying this. Been trying problem this since 3pm.

 

[drinkmorejava]

From my investments textbook. They assume a nominal $1000 bond value. You should be all set with this and the annuity table above.

 

[Humpy]

Same. I work amongst tons of CPA's - but I work on implementations of software that performs this shit to replace the accountants

You fucker!

I'm an "accountant".

 

[eng2d2]

I found this on chegg. It's the same type of question but with different values for the variables. It looks like the present value tables should be in your book to reference for the question.

The annual interest on the bonds = 8% stated rate × $60,000 face amount = $4,800

The remaining term of the bonds is 15 years

The present value of an interest annuity of $4,800 for 15 years at 12% = $4,800 × 6.8109 = $32,692.32

The present value of the maturity value of $60,000 in 15 years at 12% = $60,000 × 0.1827 = $10,962.00

The market value of the bonds = PV of interest + PV of maturity value = $32,692.32 + $10,962.00 = $43,654.32

Well MrRamon we finally figured it out. We didn't subtract the years and we didn't know how to use both tables. With your illustration it helped her solved the problem .

 

[eng2d2]

From my investments textbook. They assume a nominal $1000 bond value. You should be all set with this and the annuity table above.

Hey drinkmore after solving the problem we looked at this and this really helped us understand the problem some more. Thanks for this illustration.

 

[bruceb]

I would hold onto them as Tyson is a good company and will continue to pay the dividend. The downside is that when the bond yield the goes up, the value of the bond goes down. So you bought the bond at par $100 per $1000 .. It may now be worth say $.090 per $1000 of bond value. Eventually, the bond price usually comes back. You also need to see if the bonds have a call feature and if they do when it is. A lot of times they call the bonds over par, so you actually get back more than you paid for them. Right now, it looks like all the Tyson bonds are trading over Par Value. You should check with your broker to double check the current price. It might be prudent to take the gain.

 

[BoomerD]

I would hold onto them as Tyson is a good company and will continue to pay the dividend. The downside is that when the bond yield the goes up, the value of the bond goes down. So you bought the bond at par $100 per $1000 .. It may now be worth say $.090 per $1000 of bond value. Eventually, the bond price usually comes back. You also need to see if the bonds have a call feature and if they do when it is. A lot of times they call the bonds over par, so you actually get back more than you paid for them. Right now, it looks like all the Tyson bonds are trading over Par Value. You should check with your broker to double check the current price. It might be prudent to take the gain.

You DO realize...this was for a homework question...right?

 

[s0me0nesmind1]

You fucker!

I'm an "accountant".

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