Suppose a Google

question 49

Multiple Choice

Suppose a Google.com bond will pay $4,500 ten years from now.If the going interest rate on safe 10-year bonds is 4.25%, how much is the bond worth today?

• A) $2,819.52
• B) $2,967.92
• C) $3,116.31
• D) $3,272.13
• E) $3,435.74

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Definitions:

Carrying Value

Also known as book value, it's the amount at which an asset is recognized on the balance sheet after deducting accumulated depreciation or amortization.

Dividend Distributions

Dividend distributions are payments made by a corporation to its shareholders, usually derived from the company’s earnings, representing a portion of the profits.

Investee

An entity in which an investor holds an interest, where the investor has significant influence but not full control or ownership.

Periodic Net Income

The profit or loss reported by a company at the end of a specific accounting period, reflecting all revenues and expenses.