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Is a bond's price the net present value of expected future cash flow at a discount rate?
Yes, a bond's price is essentially the net present value (NPV) of its expected future cash flows, which include the periodic coupon payments and the principal repayment at maturity. These cash flows are discounted back to their present value using a specific discount rate, typically the yield to maturity or the market interest rate. This calculation reflects the time value of money, allowing investors to determine the bond's fair value based on current market conditions.
What else can I help you with?
When effective interest method is used to amortize bond premium or discount the periodic amortization will be?
increasse if the bonds were issued at either a discount or premium.
Is bonds payable debit?
Bonds payable is liability for business which is refundable in future and like all liabilities which have credit balance as default balance bonds payable also has credit balance as default balance.
What is a discount on bonds payable account in accounting?
All bonds have a stated or "par" value, which is the value that the bond will hold after the bond term is completed at maturity (par value is usually $1000 per bond). When a bond is issued at a discount, it means that a company issued the bond for less than the par value (i.e less than $1000). The original discount is calculated as the difference between the par value and the bond sale price, and it is amortized over the life of the bond.
Is amortization of discount on investment in bonds added or subtracted in converting net income to the net cash flow?
Amortization of discount is added back to net income as there is no actual cash outflow due to amortization and that's why it is added back to cash flow from operating activities.
What is the normal balance of a bonds payable account?
Normal balance of bonds payable account is credit account and it is shown under liability side of balance sheet because these are the amounts payable in future.
What is the formula for calculating the future value of compound interest bonds?
The formula for calculating the future value of compound interest bonds is: FV PV (1 r)n, where FV is the future value, PV is the present value, r is the interest rate, and n is the number of compounding periods.
What are bonds sold below face value?
Discount A+
Are bonds sold below face value?
Discount A+
How many bonds are present in CH2Br2?
There are 7 bonds present in CH2Br2: 2 carbon-hydrogen bonds, 2 carbon-bromine bonds, and 3 carbon-carbon bonds.
What types of bonds are present in table sugar?
The type of bonds that are present in table sugar are covalent bonds. Carbon, hydrogen, and oxygen comprise these covalent bonds.
What are the no of pi bonds present in minoxidil?
There are two pi bonds present in the structure of minoxidil.
How many bonds are present in NHCL2?
There are a total of 6 bonds present in NHCl2. This includes the two N-H bonds, two N-Cl bonds, and two Cl-Cl bonds.
Are hydrogen bonds present in liquid barium chloride?
no,the hydrogen bonds are not present in liquid barium chloride
When effective interest method is used to amortize bond premium or discount the periodic amortization will be?
increasse if the bonds were issued at either a discount or premium.
What type of bonds present in xenon tetra oxide?
3 double bonds
What type of bond does calcium and fluorine?
They can be expected to form ionic bonds.
How many pi bonds are present in C6H6?
There are 3 pi bonds present in benzene (C6H6), which is a cyclic compound with alternating single and double bonds between carbon atoms.
