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bekas [8.4K]
4 years ago
6

Consider a bond with an equity warrant. The warrant entitles the bondholder to buy 25 shares of the issuer at €50 per share for

the lifetime of the bond. The bond is a 30-year zero-coupon bond with a €1,000 par value that has a yield to maturity of i€ = 5 percent. The price of the bond is €500. What is the value of the warrant?
Business
1 answer:
Dmitriy789 [7]4 years ago
8 0

Answer:

The value of the warrant is €231.38

Explanation:

par va;ue of zero coupon bond = €1,000

present value of €1 at 5% for 30 years yeild bond = €0.23138

value of warrant = €231.38

Therefore, The value of the warrant is €231.38

You might be interested in
An insurance company faces an ethical dilemma. A faulty computer program designed to evaluate insurance claims has been denying
kicyunya [14]

Answer: B) Whistleblowing

Explanation:

Whistleblowing is an act where someone in a company discloses unethical practices usually from the entity that they work in. It is a very risky thing to do because it could signal the end of one's career in a certain industry.

Whistleblowing however helps in contributing to entities staying ethical because they'd rather avoid the bad publicity that comes with it and this is why most companies have a whistleblowing policy to make it easier for people to come forward.

Whistleblowing can be done to the Government, the press or even the entity at fault itself.

Lori by giving an anonymous tip to the press about unethical behavior has engaged in Whistleblowing.

Examples of some well known Whistleblowers include, Edward Snowden and Chelsea Manning.

6 0
3 years ago
on april 1, 2021, a company loans one of its suppliers $58,000 and accepts a 29-month, 14% note receivable. calculate the amount
castortr0y [4]

The amount of interest revenue the company will recognizes: For 2021 it will be $4680, for 2022 it will be $6240, and for the 2023 it will be $4680.

What is interest revenue?
The income that an organisation receives from every investments it makes or on debt it owns is known as interest revenue. A business must record interest revenue underneath the accrual basis of accounting even if it has not yet received payment in cash for the interest as long as it has earned this same interest; this is done through an accrual journal entry. Interest revenue is only recorded under the cash basis of accounting when the entity receives a cash payment for interest.

For instance, if a business uses the accrual method of accounting, it might spend $10,000 on a certificate of deposit that yields 6% interest and generates $600 in interest income after a year.

The amount of interest revenue the company will recognizes :
2021 => $52000 × 12% × 9/12 = $4680
2022 => $52000 × 12% × 12 = $6240
2023 => $52000 × 12% × 9 /12 = $4680

To learn more about interest revenue
brainly.com/question/19341720
#SPJ4

6 0
2 years ago
Magnira, a cosmetics brand, launched a face cleansing cream. The television advertisements for the product promote that it is a
slega [8]

Answer:

Concentrated Targeting Strategy.

Explanation:

As Magnira is a cosmetics brand and has launched a face cleansing cream. The television advertisements for the product promote that it is a medically proven cure for acne. Given the information, Magnira most likely uses concentrated targeting strategy for its new product. In concentrated targeting strategy, firm selects and focus their all efforts on one very clearly defined and specified market segment in which they have the expertise and resources as well. This is being done with the only one marketing mix. For example, Rolex Watches only make watches for the luxury and high end customers. This strategy helps organizations and brands in developing and serving a particular niche.

6 0
3 years ago
An appliance store has total assets of $2,800,000, accounts receivable of $900,000, accounts payable of $700,000, inventory valu
nadya68 [22]
Return on assets (ROA) is the measure of how well the company uses its assets to generate earnings. It is usually expressed in percentage and is computed as:

ROA = Net Income / Total Assets
         = $42,000/$2,800,000
         = 1.5%

Thus, the store's ROA is only 1.5%
6 0
3 years ago
How would utility costs be properly classified? Select one: A. Curvilinear B. Fixed C. Variable D. Stepped E. Mixed
ANTONII [103]

Answer: Mixed

Explanation:

Here is the complete question:

Max Machining incurs the following utilities costs at different levels of production:

0 units: $120

500 units: $2,620

1,000 units: $5,120

How would utility costs be properly classified?

A) Curvilinear

B) Variable

C) Mixed

D) Fixed

E) Stepped

The utility cost here will be classified as a mixed cost. A mixed cost is a type of cost that has both fixed and variable cost. At 0 units, $120 was already spent. This shows that this cost is a fixed cost as it doesn't have anything to do with output. It'll still be paid regardless of the number of outputs while the other cost incurred are variable cost which is dependent on the number of outputs of goods.

Based on the explanation above, the answer is mixed cost.

3 0
3 years ago
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