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Greeley [361]
3 years ago
8

You are considering two bonds. Bond A has a 9% annual coupon while Bond B has a 6% annual coupon. Both bonds have a 7% yield to

maturity, and the YTM is expected to remain constant. Which of the following statements is CORRECT? a. The price of Bond B will decrease over time, but the price of Bond A will increase over time. b. The prices of both bonds will remain unchanged. c. The price of Bond A will decrease over time, but the price of Bond B will increase over time. d. The prices of both bonds will increase by 7% per year. e. The prices of both bonds will increase over time, but the price of Bond A will increase at a faster rate.
Business
1 answer:
Yuri [45]3 years ago
4 0

Answer:

c. The price of Bond A will decrease over time, but the price of Bond B will increase over time

Explanation:

Bond A has a higher coupon rate than market thus, investor will accept to purchase the bond for a higher price until the YTM of this bond equals the market rate

Bond B is the opposite, is paying lower thus, will we purchase for less.

As times passes both will get their market value closer to the face value of the bond because, at maturity the bond will pay 1,000.

Making Bond A lower his price while B increases.

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Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's t
anzhelika [568]

Answer:

8.94%

Explanation:

Firstly, we will need to find total equity and total debt of Harrington Inc inorder to apply the Dupont equation for getting ROE

Harrington's total debt = 15.00 % × $250,000

= $37,500

Harrington's total equity will be; applying accounting equation

Asset = Liabilities + Owner's equity

Owner's equity = Assets - Liabilities

= $250,000 - $37,500

= $212,500

Therefore, using the Dupont equation, we can calculate the ROE as;

(NI/Sales) × (Sales/Total assets) × (Total assets/Total common equity)

= 19,000/325,000 × 325,000 /250,000 × 250,000/212,500

= 8.94%

7 0
3 years ago
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be
In-s [12.5K]

Answer: Machine B because it has the lower Present Value

Explanation:

<h2>Machine A</h2>

= Present Value of income - Present Value of Costs

Present value of Income;

Sold for $5,000 after 10 years.

= 5,000/ (1 + 8%)^10

= $2,315.97

Present Value of Costs;

Purchased for $48,000.

Maintenance of $1,000 per year for  years.

Present value of maintenance= 1,000 * Present value factor of annuity,  10 years, 8%

= 1,000 * 6.7101

= $6,710.10

Machine A Present Value

= 2,315.97 - 6,710.10 - 48,000

= ‭-$52,394

<h2>Machine B</h2>

No salvage value.

Present Value of costs

Purchased for $40,000.

Present value of maintenance = (4,000 / (1 + 8%)^3)  + (5,000 / ( 1 + 8)^6) + (6,000 / ( 1 + 8%)^8)

= -$9,567.79

Present Value = -40,000 - 9,567.79

= -$49,568

5 0
3 years ago
At which stage of the organizational buying decision process would purchasing and engineering personnel visit potential supplier
STatiana [176]

Answer: Alternative evaluation.

Explanation:

Alternative Evaluation is the phase of the purchaser decision process where the consumer makes use of the information gotten from the information search to assess other brands in the category of the product.

For example, if a consumer is assessing a group of television and he or she has identified three attributes like price, performance and design. The consumer will assess each brand and make decision based on his or her assessment.

7 0
3 years ago
Which of the following is true? Question 8 options: The convenience yield is always positive or zero. The convenience yield is a
ss7ja [257]

Answer:

The convenience yield is always positive or zero

Explanation:

the convenience fields measure the benefit of owning an asset rather than having a forward/futures contract on an asset . For an investment asset it is always zero . For a consumption asset it is greater than or equal to zero.

8 0
3 years ago
Quien es el equipo con más champions​
Black_prince [1.1K]

Responder:

Real Madrid

Explicación:

El Real Madrid ha ganado la Liga de Campeones un récord asombroso 13 veces. (Todo lo que hice fue buscar en Google "quién es el equipo con más campeones" y eso es lo que obtuve) Espero que esto ayude.

6 0
3 years ago
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