Oub Company Issued $4,000,000, 10-Year Bonds and Agreed to Make

question 141

Essay

oub Company issued $4,000,000, 10-year bonds and agreed to make annual deposits of $303,500 to a fund. The deposits are made at the end of each year to a fund paying 6% interest compounded annually. What amount will be in the fund at the end of the 10 years?

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Definitions:

Earnings per Share

A financial ratio that measures the amount of net income earned per share of common stock. It is an indicator of a company's profitability.

Dividend Payout Ratio

The proportion of earnings a company pays to its shareholders in the form of dividends, expressed as a percentage of the company's total earnings.

Book Value per Share

A measure of the net asset value of a company allocated to each outstanding share.

Return on Total Assets

A financial ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.