answer in complete sentences, and be sure to use correct English spelling and grammar. Sources must be cited in APA format. Your response should be a minimum of one (1) single-spaced page to a maximum of two (2) pages in length;
NOTE: Show all work in arriving at the solutions requested.
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Discuss four (4) advantages and four (4) disadvantages accruing to a company that is traded in the public securities markets.
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Garland Corporation has a bond outstanding with a $90 annual interest payment, a market price of $820, and a maturity date in five years. Find the following:
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The coupon rate
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The current rate
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The approximate yield to maturity
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An investor must choose between two bonds: Bond A pays $92 annual interest, has a market value of $875, and has 10 years to maturity. Bond B pays $82 annual interest, has a market value of $900, and has two years to maturity.
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Compute the current yield on both bonds.
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Based on your computations above, which bond should the investor select?
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A drawback on the current yield is that it does not consider the total life of the bond. For example, the approximate yield to maturity on Bond A is 11.30%. What is the approximate yield to maturity on Bond B?
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Has your answer changed between parts “b” and “c” of this question in terms of which bond to select? Explain.
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