BHP has decided to issue a $1,000,000 face value 90 day bank accepted bill into the market to fund the purchase of new machinery The bill has a yield of 6 5 per annum How much will BHP raise from the issue of this bill (to the nearest dollar) The original discounter of the bill (Investor A) decides to sell the BHP bill in the secondary market (to Investor B) 20 days later for a price of $989,241 Investor B holds the bill until it matures What rate of return is earned by the original investor (Investor A), AND the holder until maturity (Investor B)

The Answer is in the image, click to view ...

Question: BHP has decided to issue a $1,000,000 face value 90-day bank accepted bill into the market to fund the purchase of new machinery. The bill

BHP has decided to issue a $1,000,000 face value 90-day bank accepted bill into the market to fund the purchase of new machinery. The bill has a yield of 6.5% per annum.

How much will BHP raise from the issue of this bill (to the nearest dollar)?
The original discounter of the bill (Investor A) decides to sell the BHP bill in the secondary market (to Investor B) 20 days later for a price of $989,241. Investor B holds the bill until it matures. What rate of return is earned by the original investor (Investor A), AND the holder until maturity (Investor B)?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

John has purchased goods from a hardware supplier and has been offered trade credit terms of 1.5/10, n/40. Calculate (a) the opportunity cost of trade credit in this case. Assuming that John can...

Interest Rate Structure For items 1-4, indicate for each pair of bonds which bond, everything else the same, should promise the HIGHER yield. 1. a. puttable bond b. straight (no put feature) bond 2....

a. John has purchased goods from a hardware supplier and has been offered trade credit terms of 1/10, n/40. Calculate the opportunity cost of trade credit in this case. Assuming that John can borrow...

When you purchased your house, you took out a 30-year annual-payment mortgage with an interest rate of 6% per year. The annual payment on the mortgage is $12,000. You have just made a payment and...

In a brief paragraph (not more than 300 words) explain -the importance of your WACC calculation; - how the WACC should be used - the impact of any errors if you made any errors in determining the...

answer each one and make sure to show your work. 1 Federal Reserve Bank (FED) lowered the target for federal funds rate from 5.25% in June 2006 to 0-25% in December 2008. and the target has remained...

QUESTION 1 (a) List and explain the major functions performed by the capital markets. (5 marks) (b) Discuss the reasons why rights issues are often used to increase the equity of both small and...

Determine Tartan Knitwears: Costs of Debt only (not WACC - this is a later question) Show all calculations and working for each part of this question Use the following information to help you answer...

Pls I need to answer to all the questions 1. Your bank offers a savings account that pays 3.5% interest, compounded annually. How much will GHS 500 invested today be worth at the end of 25 years? 2....

Within the Mundell-Fleming model assuming imperfect capital mobility, analyze the effect of a fall in autonomous investment. Focus on the effect on income. Is this effect larger under fixed or...

In Problem 14.6 on page 583, you used radio advertising and newspaper advertising to predict sales (stored in Advertise). Use the results from that problem. a. Construct a 95% confidence interval...

Accounting information is verifiable if accounting information must be available to decision makers at the same time each year. a company uses the same accounting principles from year to year....

Questions Q1. Write a Python program to retrieve the first and last colors from the following list: color_list = ["red", "green", "white", "blue", "black") Q2. Given the following dictionary,...

Why do you think it is important to combine cardholder names in your data before you conduct your analysis?

(LO 5-4) Multiple Choice: What actions should be taken by either internal auditors or management if a companys continuous audit system has too many alarms that are false positive? a. Abandon the...

How many records or rows appear in your cleaned dataset, excluding the header?