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steposvetlana [31]
3 years ago
13

RJR Nabisco recently experienced a market reevaluation due to a number of tobacco lawsuits. The firm has a bond outstanding with

15 years to maturity, and a coupon rate of 8%, with interest being paid semiannually. The required yield to maturity has risen to 16%. What is the price of the RJR Nabisco bond?
Business
1 answer:
vova2212 [387]3 years ago
6 0

Answer: The current price of the bond is $258.74

Explanation:

The present value of the bond is its Current Price

We would use the following formua to calculate the Current Price of the bond,

PV = \frac{FV}{(1+r)^{N} } + A [\frac{1-\frac{1}{(1+r)^{N} } }{r} ]

Where,

FV = Face value =  $1,000

A = Coupon payment paid semi annually = (8% x 1000) / 2 = $40

r = Yield to Maturity = 16%

N = Number of periods = 15 years x 2 = 30 semi-annual periods

PV = \frac{1000}{(1+0.16)^{30} } + 40 [\frac{1-\frac{1}{(1+0.16)^{30} } }{0.16} ]

PV = 258.73618

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soldier1979 [14.2K]
Judging by the sentence wording I'm guessing the missing word would be "risks"
8 0
3 years ago
Wang Co. manufactures and sells a single product that sells for $640 per unit; variable costs are $352 per unit. Annual fixed co
yarga [219]

Answer:

The correct answer is 45%.

Explanation:

According to the scenario, the given data are as follows:

Selling price = $640

Variable cost = $352

Annual fixed cost = $985,500

Current sales volume = $4,390,000

So, we can calculate the contribution margin ratio by using following formula:

Contribution margin ratio = (Contribution margin per unit ÷ selling price per unit ) × 100

Where, Contribution Margin = Selling price - Variable cost

= $640 - $352 = $288

So, by putting the value in the formula, we get

Contribution margin ratio = ( $288 ÷ $640 ) × 100

= 0.45 × 100

= 45%

5 0
3 years ago
Someone help me with this plz
shepuryov [24]

Answer:

With what

Explanation:

post the pic/question next time

8 0
3 years ago
A profit-maximizing firm will base its decision to hire workers on the additional costs and benefits of each worker. If the extr
tia_tia [17]

Answer:

The correct answer is total revenue; total cost.

Explanation:

Cost reduction is one of the most addressed issues in companies. They do it all the time since it is a permanent process. This is because it always seeks to improve the profitability of the company and, consequently, productivity. In other words, try to "do more with less", which is to produce more with what you have or produce the same with lower expenses. In both cases the objective is to reduce costs.

A company can reduce costs for many reasons: for a drop in sales, for lack of liquidity, for not having access to credit, etc. And when this happens, the cost cut occurs in the areas of human resources with the dismissal of personnel, the restructuring of the purchase processes, changes of suppliers, among other measures.

It is important to know what the current production process is and, if possible, redesign it, seeking to eliminate unnecessary steps, that is, to shorten the production processes. A long production line implies a greater number of workers, more work in the process and more time in product development. It also increases the possibility of errors in the process.

To make the cost reduction in your company even more efficient, you need to know each process deeply to detect unnecessary steps and help you reduce processes and / or procedures that in the medium or long term translate into cost reduction.

8 0
3 years ago
Pepsi has cooperated with America on the Move to improve many of its products and their labels, such as reducing the saturated f
Kitty [74]

Answer:

ShareHolders.

Explanation:

A share holder is the ultimate owner of any company who has invested his share in return of the profits earned.

Hence, this form of social responsibility by Pepsi will portray a positive image of Pepsi in the market and will ultimately help the shareholders in the form of increased revenue due to more sales and high profits.

I hope this helps. Best of Luck.

4 0
3 years ago
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