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2 years ago

Why might a town decide to issue bonds??

Business

2 answers:

ratelena [41]2 years ago

7 0

The correct option is (C). Both A and B.

To help save money for residents and to build new roads or bridges.

Further Explanation:

Bond:

Bond is a long-term debt which is issued by the company and the company promises to pay with interest to their bondholders.

• Investing in bonds will make the residents of the town, save money.

• Investing in bonds will help in building new roads or bridges. Bonds will help the town to invest in building and it will develop the town.

• The bonds will make the town residents to earn interest by issuing the bonds and help them to save money for them, and also help to build new roads or bridges. Therefore, this option is correct.

• The bonds will make the town to earn interest by issuing the bonds and help them to save money for them, and also help to build new roads or bridges. Therefore, the option (C) is correct.

Thus, the bonds will give a regular interest annually to the residents of the town and by this, they can save their money and invest in for the development of their town like, invest in their money to build the new roads and bridges.

Learn More:

1. Stock and bonds

brainly.com/question/1330190

2. Stock price

brainly.com/question/11192535

3. Stock portfolio

brainly.com/question/5728646

Answer Details:

Grade: High school

Chapter: Stocks and bonds

Subject: Business studies

Keywords: Why might a town decide to issue bonds.

Ket [755]2 years ago

3 0

I hope this answers your question. The bond that a town might issue is called a municipal bond. Municipal bonds are issued to finance a local government’s public projects like road repairs, school building, airports, seaports or any other infrastructure-related repairs.

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Forrester Company is considering buying new equipment that would increase monthly fixed costs from $276,000 to $544,500 and woul

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Answer:

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You bought one of Great White Shark Repellant Co.’s 5.8 percent coupon bonds one year ago for $1,030. These bonds make annual pa

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Answer:

total rate of return on the Bond = 9.40%

Explanation:

given data

coupon bonds = 5.8%

bonds price = $1,030

maturity time = 14 year

required return on the bonds = 5.1 percent

solution

we know here market price of the bond is Present Value of Coupon Payments + Present face Value

so that face Valueof bond = $1,000

and here annual Coupon Amount will be

annual coupon amount = $1000 × 5.80%

annual coupon amount = $58

and here Market Price of the Bond will be

Market Price of Bond = Present Value of Coupon Payments + Present face Value ......................1

here Present Value of Coupon Payments at PVIFA 5.10% and 14 Years

Present Value Annuity Inflow Factor (PVIFA) = $\frac{1-(1/(1+r)^t}{r}$ ....2

Present Value Annuity Inflow Factor = $\frac{1-(1/(1+0.0510)^14}{0.0510}$

Present Value Annuity Inflow Factor = 9.83566

and

Present Value Inflow Factor (PVIF) 5.10%, 14 Years= $\frac{1}{(1+r)^t}$ ...........3

Present Value Inflow Factor (PVIF) = $\frac{1}{(1+0.0510)^14}$

Present Value Inflow Factor = 0.49838

Market Price of Bond = ( $58 × 9.83566 ) + ( $1,000 × 0.49838 )

Market Price of Bond = $1,068.85

so total rate of return on the Bond will be

total rate of return on the Bond = [ { Annual Coupon Amount + ( Change in Bond Price ) } ÷ Current Price] ...............4

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