Answer:
A) the current price of the bond is:
($50 x 1) + ($50 x 0.97) + ($50 x 0.96) + ($50 x 0.93) + ($50 x 0.92) + ($1,050 x 0.91) = $1,194.50
B) assuming that the bond is trading at par, you have a great opportunity to make money:
maturity zero coupon return of coupon
bond's price bond
0 $1,000 $0
0.5 $1,000 $50
1 $970 $100
1.5 $960 $150
2 $930 $200
2.5 $920 $250
3 $910 $300
You can buy 10 coupon bonds = -$10,000
Sell short 1 One-year zero coupon bond = $970
Sell short 1 Two-year zero coupon bond = $930
Sell short 11 Three-year zero coupon bond = $10,010
Positive cash flow = $1,910
At the end of year 1, you can pay the One-year zero coupon bond with the coupons received = $1,000 (cash flows = $0)
At the end of year 2, you can pay the Two-year zero coupon bond with the coupons received = $1,000 (cash flows = $0)
At the end of year 3, you can pay the Three-year zero coupon bonds with the coupons + maturity value received = $11,000 (cash flows = $0)
If the coupon bonds are selling at par, you could earn today $1,910 for every 10 bonds that you buy.
5.A 15-year corporate bond has a par value of $100,000 and a 4.5% annual coupon rate. Assume that your required rate of return is 8% and that you plan to hold onto this bond for 10 years. You and the market have expectations that in 10 years the yield-to-maturity for this bond (or another bond with similar risk and maturity) will be 10%. How much are you willing to pay for this bond today
Answer:
$66,857.55
Explanation:
The price of the bond in 10 years will be:
PV of face value = $100,000 / (1 + 10%)⁵ = $62,092.13
PV of coupon payments = $4,500 x 3.7908 (PV annuity factor, 10%, 5 periods) = $17,058.60
market value in 10 years = $79,150.73
In order to determine the price that you are willing to pay for the bond:
PV of market value in 10 years = $79,150.73 / (1 + 8%)¹⁰ = $36,662.10
PV of coupon payments = $4,500 x 6.7101 (PV annuity factor, 8%, 20 periods) = $30,195.45
Price you should be willing to pay = $66,857.55
In 2020, a company receives advance payments from its customers. The company will deliver the products in 2021. At the end of 2020, the company will __________ related to this transaction (enter 1, 2, 3, or 4 that represents the correct answer).
1. record a deferred tax asset
2. record a deferred tax liability
3. have a permanent difference
4. report no difference between financial income and taxable income for 2020.
Answer:
In 2020, a company receives advance payments from its customers. The company will deliver the products in 2021. At the end of 2020, the company will ____1______ related to this transaction (enter 1, 2, 3, or 4 that represents the correct answer).
1. record a deferred tax asset
Explanation:
For having paid income tax in 2020 on the cash received for deferred revenue, the company will record a deferred tax asset. This deferred tax asset will then be offset in 2021 when the sales revenue will be recorded according to the financial income accounting. Deferred tax asset arises from the overpayment or advance payment of taxes. The opposite of a deferred tax asset is called a deferred tax liability, representing income tax owed, which will be settled in the coming years.
For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:
Answer:
Break even in units = 5000 units
Explanation:
Break even quantity or break even in units is the quantity of units that must be sold in order for the company to break even. Break even is a situation where the total revenue of the business equals its total costs and there is a situation of no profit and no loss.
The formula to calculate break even quantity is,
Break even in units = Fixed costs / Contribution margin per unit
Where,
Contribution margin per unit = Selling price per unit - Variable cost per unit
Contribution margin per unit = 2 - 1.6 = $0.4
Break even in units = 2000 / 0.4
Break even in units = 5000 units
ABC's current dividend is $5 and has an annual growth rate of 6%. What would be the current price of a share of ABC stock if investors require 20% rate of return
Answer:
$37.86
Explanation:
Calculation for the current price of the share
Using this formula
Current price=D1/(Required return-Growth rate)
Let plug in the formula
Current price=(5*1.06)/(0.2-0.06)
Current price=5.3/0.14
Current price=$37.86
Therefore the current price of the share will be
$37.86
The real risk-free rate is 3.05%, inflation is expected to be 3.60% this year, and the maturity risk premium is zero. Ignoring any cross-product terms, i.e., if averaging is required, use the arithmetic average, what is the equilibrium rate of return on a 1-year Treasury bond? - Google Search
Answer:
6.65%
Explanation:
Real risk-free rate = 3.05% (r*)
Expected inflation = 3.60% (IP)
Maturity risk premium = zero
1-year bond yield = r* + IP
1-year bond yield = 3.05% + 3.60%
1-year bond yield = 6.65%
Hence, the equilibrium rate of return on a 1-year Treasury bond is 6.65%
Consider the following information: Portfolio Expected Return Standard Deviation Risk-free 6 % 0 % Market 10.8 24 A 8.8 13 a. Calculate the Sharpe ratios for the market portfolio and portfolio
Answer:
Sharpe ratio of market portfolio = 0.2
Sharpe ratio of market portfolio = 0.2154
Explanation:
Calculation for the Sharpe ratios for the market portfolio and portfolio A
Market portfolio
Using this formula
Sharpe ratio of market portfolio = (Expected return of portfolio - Risk free return on portfolio)/ Standard deviation
Let plug in the formula
Sharpe ratio of market portfolio= (10.8 - 6)/24
Sharpe ratio of market portfolio=4.8/24
Sharpe ratio of market portfolio = 0.2
Portfolio A
Using this formula
Sharpe ratio of portfolio A = (Expected return of portfolio - Risk free return on portfolio)/ Standard deviation
Let plug in the formula
Sharpe ratio of portfolio A= (8.8 - 6)/13
Sharpe ratio of portfolio A=2.8/14
Sharpe ratio of portfolio A= 0.2154
Therefore the Sharpe ratios for the market portfolio is 0.2 and portfolio A is 0.2154
Bob inspires his employees to follow a vision, facilitate change, and create a strongly positive climate. Bob is a(n) _______ leader.
Answer:
Authoritative leader.
Explanation:
This is explained to be an effective leadership pattern that dictates certain forms and policies to everyone who finds himself under the said leader. Its usefulness is well seen in certain industries and organizations where decisions have to be made urgently and efficiently, and where it is important that certain tasks are performed during a specific way and there's little room for mistakes, like in construction, manufacturing and also the military. Using this sort of leadership prevents the possibilities of projects getting sidelined by an absence of organization or solid deadlines, and allows team members to target particular tasks without having to participate within the complex decision-making process.
Phoenix Financial Ltd. has suffered losses in recent years, and its stock currently sells for only $0.50 per share. Management wants to use a reverse split to get the price up to a more "reasonable" level, which it thinks is $25 per share. How many of the old shares must be given up for one new share to achieve the $25 price? Assume this transaction has no effect on total market value.
Answer:
Phoenix Financial Ltd.
For one new share to achieve the $25 price, 50 of the old shares must be given up.
Explanation:
a) Data and Calculations:
Current stock price = $0.50
Reverse stock split to get the price up to a more "reasonable" level = $25 per share
To calculate the number of shares to be give up $25/$0.50 = 50 shares
b) Reverse stock split takes place when the company wants to shore up the per unit stock price. It consolidates the number of existing shares of stock into fewer, proportionally more valuable and reasonable, share price per unit. There are many reasons for reducing the outstanding shares. It may be that the company is facing some financial distress. Or in this case, management may want "to get the price up to a more reasonable level."
A stock has no dividends. The last period's FCFF is $4.98 and it has an estimated annual free cash flow growth rate of 8%. The WACC for this stock is 8.3% and its long term growth rate is 2.46%. It also has an ROE of 12.4%. You also found out that the firm has debt per share of $25.61. What it the estimated intrinsic value using the constant state FCFF method
Answer:
The estimated intrinsic value is $92.10
Explanation:
As per given data
FCFF = $4.98
Annual Free cash flow growth = 8%
WACC = Required rate od return = 8.3%
Long term growth rate = 2.46%
ROE = 12.4%
Use following formula to calculate the Intrinsic value
Intrinsic value = FCFF x ( 1 + Annual Free cash flow growth ) / ( WACC - Long term growth rate )
Placing values in the formula
Intrinsic value = $4.98 x ( 1 + 8% ) / ( 8.3% - 2.46% )
Intrinsic value = $92.10
A company offers bonds at a discount price of $800 for a 4% $1,000 bond that matures in 20 years with a dividend payable semi annually. What is the closest effective interest rate per year, compounded semiannually
Answer:
5.69 %
Explanation:
The Interest rate on this Bond is its Yield to Maturity (YTM) and is calculated as :
PV = - $800
PMT = ($1,000 × 4%) ÷ 2 = $20
N = 20 × 2 = 40
P / Yr = 2
FV = $1,000
YTM = ?
Using a financial calculator to input the data as above, the Yield to Maturity on this Bond is 5.6870% or 5.69 %
Insurance offers consumers
A. protection from the costs of unplanned events.
B. a guarantee that a business will succeed.
C. income to help start a new business venture.
D. full reimbursement after business setbacks.
Insurance is a means of protection that offers financial, medical and many sorts of supports at the time of need. The insurance can range from car to loan to many multiple things.
Hence its a sort of protection for the unknown costs and protects us from unknown events.Hence the option A is correct.
Learn more about the insurance offers consumers.
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what does ip address mean??
Answer:
It is where you live and more stuff I forgot
Which of the following is not a travel, hospitality, and tourism career?
A. Chef
B. Pilot
C. Curator
D. Truck driver
Answer:
I think its cyan because a chef is hospitality, pilot is tourism, and truck driver is travel
Answer:
I think its chef
Explanation:
In the kinked demand curve theory, price elasticity of demand is __________ at prices above the kink than below the kink. It follows that a price hike above the kink will reduce quantity demanded by __________ than a price cut below the kink will __________ quantity demanded.
Answer:
In the kinked demand curve theory, price elasticity of demand is GREATER at prices above the kink than below the kink.
It follows that a price hike above the kink will reduce quantity demanded by A PROPORTIONALLY HIGHER AMOUNT than a price cut below the kink will REDUCE IN A LESS THAN PROPORTIONAL AMOUNT THE quantity demanded.
Explanation:
A kinked demand curve refers to a demand curve that is not a straight line, and the price elasticity of demand varies depending on the price of the goods or services. The kinked demand curve model is generally used when trying to explain how oligopolies exist and why their prices tend to be sticky or rigid above the kink of the curve (due to higher price elasticity).
A company called and redeemed a $500,000, 7% bond issue at 98. If the unamortized discount is $4,000, the entry will include a:________
a. Debit to loss on bond retirement for $6,000
b. Credit to gain on bond retirement for $6,000
c. Debit to loss on bond retirement for $4,000
d. Credit to gain on bond retirement for $4,000
Answer:
Option B
Explanation:
Bonds payable will be debited because it was a liability to be paid when we issue bonds we debit the cash and credit the bonds payable. gain on redemption, discount and cash will be credited.
B. Credit to gain on bond retirement for $6,000
Dr Bonds Payable 500,000
Cr Gain on retirement 6,000
Cr Discount on Bonds Payable 4,000
Cr Cash 490,000
Marcie's has sales of $179,600,depreciation of $14,900, costs of goods sold of $138,200, and other costs of $28,400. The tax rate is 35 percent. What is the net income
Answer:
-$1,235
Explanation:
Marcie's has a sales of $179,600
Depreciation is $14,900
Cost of goods sold is $138,200
Other costs is $28,400
Tax rate is 35%
Therefore the net income can be calculated as follows
= (sales - other costs-cost of goods sold-depreciation)(1-tax rate)
= (179,600-28,400-138,200-14,900)(1-35/100)
= -1,900 × 1-0.35
= -1,900 × 0.65
= -$1,235
Hence the net income is -$1,235
Bellue Inc. manufactures a single product. Variable costing net operating income was $96,300 last year and its inventory decreased by 2,600 units. Fixed manufacturing overhead cost was $1 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year
Answer:
$93,700
Explanation:
To get the absorption costing net operating income for last year, reconcile the Variable costing net operating income to absorption costing net operating income.
Reconciliation of Variable Costing Profit to Absorption Costing Profit
Variable costing net operating income $96,300
Less Fixed Assets in Beginning Inventory ($2,600)
Absorption costing net operating income $93,700
In the spirit of a SWOT analysis, a company’s strengths are defined somewhat relative to:_______
a. behavior of non-buyers.
b. competitors’ misfortunes.
c. other providers in the marketplace.
d. customer satisfaction levels.
Answer:
c. other providers in the marketplace.
Explanation:
SWOT analysis can be defined as a strategic technique which is used by organizations to plan through the identification of its strength, weakness, opportunities and threats in relation to its business.
The internal environment of an organization such as employees, policies, management and culture offers an organization strength.
In the spirit of a SWOT analysis, a company’s strengths are defined somewhat relative to other providers in the marketplace. This ultimately implies that, when its close rivals in the same industry or market are not coordinated, organized, effective and efficient in their provisions of goods and services, it gives the organization a competitive advantage (strength) over them. Thus, an organization should always ensure that it uses the weakness of other providers in the marketplace as its own strength to achieve excellence.
What can a government do to best redistribute wealth?
A. Put tariffs and duties in place to collect revenue.
B. Offer government-owned lands for sale to the public.
C. Encourage the creation of small businesses by means of grants.
D. Adopt of a progressive tax system.
On April 1, 2013, Maggie bought a new delivery truck for her business. The purchase price of the truck was $34,000. Maggie wrote a check for a 20% down payment. The interest rate on the loan is 8% and the loan period is nine months. How much interest must Maggie record when she pays off the loan on December 31st
Answer:
interest expense = $1,632
Explanation:
the original journal entry to record the purchase is:
April 1, 2013, truck purchased
Dr Truck 34,000
Cr Cash 6,800
Cr Notes payable 27,200
the interest expense = $27,000 x 8% x 9/12 = $1,632
the journal entry to record the payment of the note payable is:
December 31, 2013, payment of note payable
Dr Notes payable 27,200
Dr Interest expense 1,632
Cr Cash 28,832
The new interactive technologies are not enough to cement a relationship, because companies need to change their behavior toward a customer and not just their communication. Explain what this statement means. Do you agree or disagree?
Explanation:
I agree with this statement, due to the fact that new interactive technologies are a communication channel between company and consumer, but it is the organization itself that should use the new interactive communication technologies in order to change its behavior that will assist in engagement and building customer relationships.
Relationship marketing can help companies to engage consumers through the development of product advertising campaigns that generate value and increase brand awareness, in addition to the ease that interactive technological tools have to enable greater interaction between consumer and company, decrease response time, answer questions, etc.
A company with strong customer relationships gains significant competitive advantages, such as strong market positioning and consumer loyalty.
An account is governed by compound interest. The interest for three years on $480 is $52. Find the amount of discount for two years on $1000.
Answer:
$66.27
Explanation:
using the present value formula:
($480 + $52) = $480 / (1 + r)³
$532 = $480 / (1 + r)³
(1 + r)³ = $532 / $480 = 1.108333
∛(1 + r)³ = ∛1.108333
1 + r = 1.0349
r = 0.0349 = 3.48%
if you are going to discount $1,000 by 3.48% during 2 years:
PV = $1,000/1.0348² = $933.73
the discount = $1,000 - $933.73 = $66.27
I’ll give you 100 points
What is the discount offered on the AirPod pros “thank you” screen
25%
40%
50%
Answer: 40%
Explanation:
The discount offered on a product refers to the percentage value given off on the original cost of the product. In some cases, discount may also involve giving off a fixed amount on the original price.
The percentage discount offered on a product may differ depending on the marketing strategy or competition being faced from rival products. The discount percent which is being circulated on various websites and stores on the sale of Airpod pros is about 40%.Therefore, the percentage discount on sale being offered on the sale of Airpod pros is approximately 40%.
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O'Donnell Company makes computer chips. Sam is manager of the company's maintenance department. Because his maintenance technicians are so well trained in maintaining expensive and sensitive circuit board stamping equipment, Sam has been authorized to contract to perform maintenance for outside customers. In this company, the maintenance department is likely organized as
Answer:
Profit center
Explanation:
Proft center is simply a type or form of programs or services that is given (offered) within organization or a club operations that gives an additional revenue and profits to their bottom line product/services. It is also referred to as a type of strategic business unit.
Profit Centers are set up to Increase Revenue and Profitability by/usually offered for additional fee and less dependence on monthly dues
Bendel Incorporated has an operating leverage of 5.8. If the company's sales increase by 12%, its net operating income should increase by about:_________
Answer:
69.60 %
Explanation:
Degree of Operating Leverage shows the times Earnings Before Interest and Tax (EBIT) will change as a result of a change in sales contribution. Increases of sales of 12% will lead to increase in EBITof 69.60 % (12% × 5.8).
Which type of work would include providing advice to managers on how to reduce the organization's costs?
OA public relations manager
B. management analyst
OC. marketing researcher
OD
H.R. manager
Answer:
B. management analyst
Explanation:
A management analyst helps an organization by seeking ways to increase revenue, reduce costs, and become more profitable. They study an organization's design, systems, and procedures and advise management on improving efficiency. Management analysts or management consultants work as private consultants. However, some large organizations employ them. Management analysts regularly work in the business field.
Answer:
B. management analyst
Explanation:
Which of these are examples of securities? Check all that apply.
a certificate representing ownership of a corn harvest
a bar of gold stored in an investor's home
a stack of lumber stored at an investor's warehouse
a stock
a bond
Answer:
a certificate representing ownership of a corn harvest
a stock
a bond
Explanation:
did it on edg
A certificate representing ownership of a corn harvest, a stock, or a bond. is this correct according to the question.
What is Corn Harvesting?Because freshly picked corn is a delight and tastes far better than corn from the grocery store, gardeners are ready to invest their time and garden space in cultivating it. When the corn is at its absolute best, harvest it. If left alone for too long, the kernels get hard and starchy.
One of the most crucial aspects of a quality crop is knowing when to harvest the corn. About 20 days after the silk first develops, corn is ready for harvest. The husks are still green during harvest time while the silk goes brown.
Early in the morning is the finest time to harvest corn. Pull down while holding the ear firmly, then twist and pull. Usually, it is simple to remove from the stalk. For the first few days, only harvest what you can consume in a day, but be careful to gather the entire crop while it is still in the milky stage.
To learn more about Corn Harvesting follow the link.
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You manage an equity fund with an expected risk premium of 11.4% and a standard deviation of 28%. The rate on Treasury bills is 5.2%. Your client chooses to invest $50,000 of her portfolio in your equity fund and $150,000 in a T-bill money market fund. What is the expected return and standard deviation of return on your client’s portfolio? (Round your answers to 2 decimal places.)
Answer:
The Expected return of the Portfolio is 8.05% and the standard deviation is 7%
Explanation:
The computation is shown below:
Given that
T-bill rate or risk-free rate = 5.20%
The Expected Risk premium of fund = 11.40%
As we know that
Expected Return of Equity = Risk premium + Risk free rate
= 11.4%+5.2%
= 16.60%
Now
Weight of equity fund is
= $50,000 ÷ ($50,000 + $150,000)
= 0.25
And,
Weight of T-bills is
= $150,000 ÷ ($50,000 + $150,000)
= 0.75
Also the correlation between risk free and the fund would always be zero
The Standard deviation of Equity fund= 28%
ANd, the Standard deviation of T-bills= 0
Now
Expected return Portfolio = (weight of fund × expected return) + (weight of risk free × rate of return)
= (0.25 × 16.60%) + (0.75 × 5.2%)
= 8.05%
And,
The standard deviation of the portfolio (σp) is
= √(wA × standard deviation of A )^2 + (wB × standard deviation of B ) ^2 + (2 × wA × wB × standard deviation of A ×standard deviation of A × rBM)
= √((0.25 × 28%)^2 + (0.75 × 0%)^2 + (2 × 0.25 × 0.75 × 28% × 0% × 0))
= 7.00%
Hence, the Expected return of the Portfolio is 8.05% and the standard deviation is 7%
31.Robin Company uses a periodic inventory system. Use the following details to calculate the cost of goods sold. Beginning merchandise inventory $2,000 Ending merchandise inventory 2,300 Purchases 22,000 Purchase Discounts 700 Purchase Returns and Allowances 1,500 Freight In 4,200
Answer:
$23,700
Explanation:
First, we need to calculate the cost of goods purchased
Cost of goods purchase = Purchases - Returns and allowances - Discounts + Freights in
= $22,000 - $1,500 - $700 + $4,200
= $24,000
Cost of goods sold using periodic inventory system
Cost of goods sold = Beginning inventory + Cost of goods purchased - Ending inventory
= $2,000 + $24,000 - $2,300
= $23,700
Camille Keegan sells lamps for $92.10 that cost her $62.00. What is Camille's percent markup based on the selling price? (Round to nearest hundredth percent.)
Answer:
Mark-up= 0.4859 = 48.59%
Explanation:
Giving the following information:
Camille Keegan sells lamps for $92.10 that cost her $62.00.
To calculate the mark-up, we need to use the following formula:
Mark-up= (selling price/unitary cost) - 1
Mark-up= (92.1/62) - 1
Mark-up= 0.4859 = 48.59%
