question archive The table below shows the information related to Hummingbird company
The table below shows the information related to Hummingbird company
Subject:AccountingPrice:2.86 Bought3
The table below shows the information related to Hummingbird company.
Compute the Issuance of stock.
Beginning stockholders' equity $35200
Ending stockholders' equity 50300
Issuance of stock
Net Income 13000
Dividends 3350
Last year, Kevin Smith purchased a $1000 corporate bond with an annual interest rate of 5.75%. The bond's current market price is $660.
Calculate the annual interest and the current yield. Round all answers to two decimal places.
The annual interest of the corporate bond is $
.
The current yield of the bond is
%.
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Stock issuance is $5,450.
Annual Interest rate is $57.5
Current yield is 8.71%
Step-by-step explanation
Stock issuance
Closing Stockholders equity =Opening stockholders equity+Stock issued+Net income-Dividend paid
50,300=35,200+Stock issued+13,000-3350
50,300=44,850+Stock Issued
Stock Issued=50,300-44,850
Stock Issued= $5,450
Thus Stock issuance was $5,450.
Annual Interest rate
The annual interest of the corporate bond is $
Annual interest = $1000*0.0575
Annual interest =$57.5
Annual interest rate is thus $57.5
Current yield
Current yield=interest earned/current price
Interest earned=57.5
Current price=660
Current yield=57.5/660
Current yield=0.08712
Current yield is thus 8.71%
