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2 years ago

Credit risk measures using the structural model: assume a company has the following characteristics.

Business

1 answer:

Alexeev081 [22]2 years ago

4 0

Answer:

a ) Probability of default of debt over the time to maturity is 12.92%

(b ) Expected loss: $39.53

(C ) Present value of expected loss is $45.59

Explanation:

a ) Probability of default of debt over the time to maturity is 12.92%

(b ) Expected loss: $39.53

(C ) Present value of expected loss is $45.59.

Values calculated as shown in my detailed step by step answer at the attachment.

please kindly refer to attachment.

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Which of the following would an economist most likely classify as a need

taurus [48]

It is D. A part-time job to earn extra money.

7 0

2 years ago

If Treasury bills are currently paying 5.2 percent and the inflation rate is 2.7 percent, what is the approximate real rate of i

Alexxandr [17]

Answer:

2.43 %

Explanation :

Real Interest rate = (1 + nominal rate) / (1 + inflation rate) - 1

therefore,

Real Interest rate = 1.052 / 1.027 - 1

= 2.43 %

the approximate real rate of interest is 2.43 %

3 0

2 years ago

S&L Financial buys and sells securities that it typically classifies as available-for-sale. On December 27, 2018, S&L pu

nikdorinn [45]

Answer:

2018 loss for 1,500

2019 gain for 4,000

Explanation:

purchase at 715,000

December 31th 713,500

adjusting entry december 31th

loss on investment 1,500 debit

marketable securities 1,500 credit

january 3rd, 2019

cash 717,500 debit

gain on investemnt 4,000 credit

martetable securities 713,500 credit

to record gain on investment

6 0

3 years ago

Could I Industries just paid a dividend of $1.62 per share. The dividends are expected to grow at a rate of 20 percent for the n

nata0808 [166]

Answer:

Explanation:

Using the dividend growth model = Do(1+g)/Ke-g

Do=1.62$

G=4%

Ke=12%

Do(1+g)/Ke-g = 2.0736(1+4%)/12%-4%

= 1.6848

/8%

= 53.916

Year Year Year Year Year

0 1 2 3 4

20% 20% 20% 20%

Dividend 1 1.2 1.44 1.728 2.0736

Ifninty dividend 55.91*

Total Cashflows 1 1.2 1.44 1.728 55.98

Pres.Val @12% 1 1.07142 1.14795 1.22995 35.583

Value of stock 40.030

4 0

3 years ago

Uncle Tupelo's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season.

ladessa [460]

Answer:

Interest expense --------$1,500

Interest payable-------------- $1,500

Explanation:

Given the following ;

Amount of note signed = $75,000

Annual interest rate = 12% = 0.12

Date signed = November 1

Calculate interest expense to be made in the adjusting entry by December 31 :

NOTE: No entries have been made previously for the interest expense

Monthly Interest = (Amount × rate) ÷ 12

Monthly interest = ($75,000 × 0.12) ÷ 12

Monthly interest = $9000 ÷ 12 = $750

November 1 to December 31 = 2 months

$750 × 2 = $1500

Interest expense = $1,500

3 0

3 years ago