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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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A company’s past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, an
Naddika [18.5K]

Answer:

$213,250

Explanation:

The calculation of cash inflow is shown below:-

                    Expected cash collections

                       For the month of June

Months       Sales              Percentage     Expected collections

April           $282,500        5%                    $14,125

May            $213,750         30%                  $64,125

June           $225,000        60%                 $135,000

Total collection in the month of June        $213,250

Here we assume Sales for April$282,500, May $213,750 and June $225,000.

Please ignore the last value as it is not relevant to the question

4 0
3 years ago
organizations can gain competitive advantage simply by matching their competition in terms of cutting cost and responsiveness to
Zepler [3.9K]
True, all business live on competition. Whatever other's may have they compete to make theirs better than the other to make a profit
3 0
3 years ago
Read 2 more answers
Emerson Inc.'s would like to undertake a policy of paying out 45% of its income. Its latest net income was $1,250,000, and it ha
AfilCa [17]

Answer:

$2.50

Explanation:

Given that,

Dividend Paying out under a policy = 45% of its income

Net income = $1,250,000

Number of shares outstanding = 225,000

Total dividends:

= 45% of its income

= $ 1,250,000 × 45%

= $562,500

Dividend per share:

= Total dividends ÷ Number of shares outstanding

= $562,500 ÷ 225,000

= $2.50

7 0
3 years ago
Sweet night :) sleep tight​
Softa [21]

Answer:

good night

Explanation:

sweet dreams :)

3 0
2 years ago
When your local Internet service provider increased its monthly charge from $40 to $50, the number of subscribers fell from 2,00
love history [14]

Answer: Inelastic

Explanation:

Based on the information given, we would calculate the elasticity of demand which would be:

= (Change in Quantity / Change in Price) (Initial Price/ Initial Quantity)

Change in Quantity = 1800 - 2000 = -200

Change in Price = 50 - 40 = 10

Initial Price = 40

Initial Quantity = 2000

Elasticity of demand would then be:

= (-200/10)(40/2000)

= (-20)(0.02)

= -0.4

Since elasticity of demand is less than 1, it is an inelastic demand.

7 0
3 years ago
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