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1 year ago

If a bond's coupon rate exceeds its yield to maturity, the bond is selling at ____________.

Business

1 answer:

Lera25 [3.4K]1 year ago

5 0

If a bond's coupon rate exceeds its yield to maturity, the bond is selling at a premium over par.

A premium is an amount that an insured person pays to an insurance company on a regular basis to cover a risk. Description: In an insurance contract, the risk is transferred from the policyholder to the insurance company. To take on this risk, insurance companies charge an amount called a premium.

This is the price paid to an insurance company by an individual or company wishing to enter into an insurance policy. Premiums are the income of insurance companies. The premium amount depends on the type of insurance. It also depends on factors such as the type of insurance coverage. The age group to which the policyholder belongs.

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A university is trying to determine what price to charge for tickets to football games. At a price of $24 per ticket, attendan

m_a_m_a [10]

Answer: Price per ticket should be charged in order to maximize revenue is $15.

70000 people will attend at this price.

Explanation:

Let 'x' represent the decrease .

Using the given information,

Price per ticket = 24 - 3x

Average no. of people that watch the game = 40000 + 10000x

Additional money spent by every person = 6(40000 + 10000x)

Revenue [R(x)] = Price per ticket $\times$ Average no. of people that watch the game + Additional money spent

Revenue [R(x)] = (24 - 3x) $\times$ (40000 + 10000x) + 6(40000 + 10000x)

On solving the above equation we get ,

Revenue [R(x)] = -30000 $x^{2}$ + 180000x + 1200000

In order to find the critical point we'll differentiate the following with respect to x;

R'(x) = -60000x + 180000

∵ R'(x) = 0

x = 3

Thus, the price per ticket that should be charged in order to maximize revenue is (24 - 3 $\times$ 3 = 24 - 9 = $15)

People that will attend at this price = (40000 + 10000 $\times$ 3) = 70000

7 0

3 years ago

Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the eco

PtichkaEL [24]

Answer:

this is government alargar effect

5 0

3 years ago

The SCOR model looks at a firmâ€™s supply chain activities in three levels of increasing detail. Level 1 views SCM activities as

Tpy6a [65]

Answer:

Source processes

Explanation:

The SCOR model looks at a firm´s supply chain activities in three levels of increasing detail. Level 1 views SCM activities as being structured around five core management processes including Source processes which are processes that procure goods and services to meet planned or actual demand.

Supply chain operations reference (SCOR): It is a strategic planning tool that helps in identifying, improving and communicating supply chain management decisions within the company. It is a continuous improvement process and establishing a benchmark for the industry. It also works to develop a business process for satisfying customer´s demand. SCOR is based on five management process:

Plan
Sources.
Make.
Deliver.
Return.

Source process: This process of supply chain management is defined as steps to procure goods and services to meet the requirement for infrastructural arrangements.

8 0

3 years ago

Biden Resorts Company currently has 0.2 million common shares of stock outstanding and the stock has a beta of 2.2. It also has

frutty [35]

Answer:

Hence, the weighted average cost of capital is 15.87%.

Explanation:

We have to find current weights,

Value of equity = Shares x Share price = 0.2 x 10 = $2 million

Face Value of Bonds FV = $1 million

Semi annual coupon P = 1 x 8% / 2 = $0.04 million

Number of coupons remaining n = 5 x 2 = 10

Semi annual yield r = 13.65% / 2 = 6.825%

Value of Debt = Px [1 - (1 + r)-n] / r + FV / (1 + r)n

= 0.04 x [1 - (1 + 0.06825)-10] / 0.06825 + 1 / (1 + 0.06825)10

= $0.8 million

Total Value = 2 + 0.8 = $2.8 million

Weight of Debt = 0.8 / 2.8 = 28.57%

Weight of Equity = 2 / 2.8 = 71.45%

Amount of Debt to be raised = Weight of debt x Capital

= 0.2857 x 7.5

= $2.14 million

Since the amount of debt to be raised is less than $2.5 million, the yield will be 13.65%

Cost of Equity = Risk Free Rate + Beta x (Market Return - Risk Free Rate)

= 3% + 2.2 x (10 - 3)

= 18.4%

The weighted average cost of capital:-

WACC = Weight of Debt x Cost of Debt x (1 -Tax Rate) + Weight of Equity x Cost of Equity

= 0.2857 x 13.65% x (1 - 0.3) + 0.7145 x 18.4%

= 15.87%

8 0

2 years ago

Stakeholder impact analysis is a _____-step process that allows managers to better understand and address stakeholders' needs.

Sliva [168]

Stakeholder impact analysis is a five step process that allows managers to better understand and address stakeholders' needs.

Stakeholder impact analysis is a five steps process. Stakeholder impact analysis allows the manager to address the stakeholders’ needs and understand them better.

Stakeholder impact analysis is five steps process that allows managers to understand the need of their stakeholders. A stakeholder is any entity either person or organization, who is directly or indirectly affects the organization or its project.

The five steps of stakeholder impact analysis are:

Identify the stakeholder: At this step, managers identify who are their stakeholders that are directly or indirectly affected by their projects, products, or services.
The interest of the stakeholder: This step defines the interest of the stakeholder
Opportunities and threats associated with stakeholders: this defines the present opportunities and threats to stakeholders
Our responsibilities to stakeholders: This process defines that what is our legal, ethical, economic, and philanthropic responsibilities to our stakeholders
Effectively address the stakeholders’ concerns: This step forces to take action to effectively address the stakeholders’ concerns.

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4 0

2 years ago