Answer:
it should call back the bonds as it will save $8.25
Explanation:
Bond Price can be calculated using PV function. After 3 years,
N = 2, PMT = 5% x 1000 = 50, FV = 1000, I/Y = 2%
=> Compute PV = $1,058.25
Without the call option, the bond would be worth $1,058.25. But the firm can buy those bonds at $1,050.
Hence, it should call back the bonds as it will save $8.25
Answer:
17.76%
Explanation:
The computation of the time-weighted return on your investment is given below
But before that we have to do the following calculations
Year 1 = ($46.50 - $42.50) + 2 ÷ ($42.50) × 100 = 14.12%
Year 2 = ($54.50 - $46.50) + 2 ÷ ($46.50) × 100 = 21.51%
Now the time weighted return is
(1 + t)^2 = (1 + 14.12%) × (1 + 21.51%)
= 1.1412 × 1.2151
= √1.3867 - 1
= 17.76%
Answer:
Valuation
Explanation:
Valuation -
It refers to the process of determining the worth of some object or property , is referred to as valuation .
Or ,
The method to find the present value of any asset is known as valuation .
The process of valuation can be done on objects like , stocks , patents , business enterprises , bond of the company , property etc.
The reason for getting valuation is for investment analysis , merger , taxable events , capital budgeting .
Hence , from the given scenario of the question ,
The correct answer is valuation .
