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2 years ago

If the effective annual yield on a bond is equal to the bondʹs coupon rate, the bond will have a market value that is

Business

1 answer:

Mazyrski [523]2 years ago

4 0

Answer:

The coupon rate is the stated periodic interest payment due to the bondholder at specified times. The bond's yield is the anticipated overall rate of return. If the bond's price changes and is no longer offered at par value, the coupon rate and the yield will no longer be the same as the coupon rate is fixed and yield is a derivative calculation based on the price of the bond.

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Nipigon manufacturing has a cost of debt of 9 %, a cost of equity of 11%, and a cost of preferred stock of 10%. nipigon currentl

Vanyuwa [196]

the weighted average cost of capital for Nipigon is 0.049716

Calculate the weighted average cost of capital for Nipigon

cost of Equity share= 120,000 x $25= $30,00,000

cost of Preference share= 49,000 x $38= $18,62,000

cost of debt= $9,50,000

Total cost = $30,00,000 + $18,62,000 + $9,50,000

= $58,12,000

Weightage

Equity= $30,00,000/$58,12,000= 0.516

Preference= $18,62,000/$58,12,000= 0.320

Debt= $9,50,000/$58,12,000= 0.164

Rates

Equity = 0.11

Preference= 0.10

Debt= 0.09 (1-0.4)= 0.54

weighted average cost

Equity= 0.516 x 0.11 = 0.05676

preference= 0.320 x 0.10= 0.0320

Debt= 0.164 x 0.54= 0.00886

Total weighted average cost= 0.05676+0.0320+0.00886

=0.049716

What is the weighted average cost method?

A weighted average computation accounts for the varying levels of significance of the numbers in a data collection. A specified weight is multiplied by each value in the data set before the final computation is completed when calculating a weighted average.

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3 0

2 years ago

The equilibrium price of a good in market A is $24. The current price of the good in market A is $21. At this price, a(n) ______

qwelly [4]

Answer:

Excess supply as well as excess demand in market A

Explanation:

Equilibrium price is the price of the market, where the quantity of the goods supplied will be equal to the quantity of the goods demanded by the customers. The equilibrium price is determined by the intersect of the demand and the supply curve.

When the equilibrium price is $24, but the current price is $21, so, at this price, there would be supply and the demand in excess for the customers of the goods exist in the market A.

7 0

3 years ago

suppose the real rate is 3.4 percent and the inflation rate is 5 percent. what rate would you expect to see on a treasury bill?

Ghella [55]

the rate expected on the treasury bill is 8.57%. enter answer as a percent rounded to 2 decimal places.

The real rate is 2.1 percent

The inflation rate is 3.4 percent

To find the rate which is to be expected on a treasury bill we have to apply fisher's equation

1+R= (1+r)(1+h)

Therefore, the rate on the treasury bill can be calculated as follows

1+R= (1+r)(1+h)

r= 3.4%

= 3.4/100

= 0.034

h= 5%

= 5/100

= 0.05

R= (1+r)(1+h)-1

= (1+0.034)(1+0.05)-1

= (1.034×1.05)-1

= 1.0857-1

= 0.0857×100

= 8.57%

A Treasury invoice (T-invoice) is a brief-term debt obligation backed via the U.S. Treasury Department with an adulthood of one year or less. Treasury bills are generally bought in denominations of $1,000 even as a few can attain a denomination of $five million.

let's say an investor purchases a par price of $1,000 T-bill with an aggressive bid of $950. whilst the T-invoice matures, the investor is paid $1,000, thereby income $50 in interest on the funding.

U.S. Treasury bills are auctioned on a regular schedule. individuals should purchase T-payments from the government using the TreasuryDirect internet site. it is free to register, and it'll function like a brokerage account that holds your bonds. in addition to bidding on new troubles, You also can install reinvestments into securities of an equal type and time period. as instance, you can use the proceeds from a maturing fifty-two-week invoice to shopping for some other fifty-two-week invoice. sure brokerage corporations can also permit buying and selling in U.S. Treasuries.

To learn more about treasury bills visit here:

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7 0

1 year ago

Which of the following statements regarding diversity in the workplace is true? a. Nearly 73 percent of Fortune 500 companies no

kvasek [131]

Answer:

Explanation:

Diversity in the workplace is about bringing together people of different background , physical appearance ,religion , education , age etc.

Even though of of the answer options narrowly talk about gender diversity , the employment policy of US in having over 50% of foreign born workers in the economy is wider as this would have covered citizens of different country with various cultures and tribes , different genders , color , religion and appearance and a whole lot more.

3 0

3 years ago

Suppose Saron has 7 Birr to be spent on two goods: banana and bread. The unit price of banana is 1 Birr and the unit price of a

mojhsa [17]

Answer:

Solution:

p_x=3, G_x=\frac {100}{3}=33\frac{1}{3}p

=3,G

100

=33

p_y=5, G_y=\frac{100}{5}=20p

=5,G

100

=20

100-0.25\times 100=75100−0.25×100=75

p_x=3, G_x=\frac {75}{3}=25p

=3,G

=25

p_y=5, G_y=\frac{75}{5}=15p

=5,G

=15

p_x=6, G_x=\frac {100}{6}=16\frac{2}{3}p

=6,G

100

=16

p_y=5, G_y=\frac{100}{4}=25p

=5,G

100

=25

MU_x=68-60=8, p_x=2MU

=68−60=8,p

MU_y=29-25=4, p_y-?MU

=29−25=4,p

−?

\frac {MU_x}{p_x}=\frac{MU_y}{p_y}

\frac{8}{2}=\frac {4}{p_y}

p_y=1p

8 0

3 years ago