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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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Lapatulllka [165]

Inbound marketing is the process of coordinating and facilitating potential customers to find a particular company.

An outdoor brand called Appalachia can revitalize its Pinterest account and engage its customers on the platform by streamlining content creation:

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3 0
1 year ago
How can inequality or discrimination hurt an economy's ability to maximize its human capital?
inessss [21]
Well, if people are discriminated against and feel they are not equal to some other classes in their own society, they obviously will not be happy which will have an impact on their jobs and careers. If they are not happy, they will not give their full potential at their jobs, which will ultimately lead to less and less income for the company.
That's what I think, at least. :)
3 0
2 years ago
Read 2 more answers
A manufacturer has a monthly fixed cost of $50,000 and a production cost of $7 for each unit produced. The product sells for $16
Oxana [17]

Answer:

The manufacturer will have a c. Loss

Explanation:

The break-even point is the level of production at which the costs of production equal the revenues for a product and calculated by using following formula:

Break-even point in units = Fixed cost/(Selling price per unit-Variable cost per unit)  = $50,000/($16-$7) = $50,000/$9 = 5.556 units (rounding)

The manufacturer produces and sells 3,000 units per month < Break-even point in units. Therefore, the manufacturer will have a loss

8 0
2 years ago
Read 2 more answers
A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a:
AlexFokin [52]

Answer:

4. general partnership. 

Explanation:

A general partnership is when at least two people come together to form a business. These partners would have unlimited liabilities.

A sole proprietorship is A form of business owned by one person who has unlimited liabilities.

A corporation is a a form of business owned by many people known as the shareholders. The shareholders have limited liability.

A limited liability company is owned by at least two partners that have a limited liability.

A limited partnership is a type of partnership with two types of partners- the limited partner and the general partner. The limited partner has limited liability and he is not involved in the daily running of the business while a general partner has unlimited liabilities and she is involved in the daily running of the business.

I hope my answer helps you

6 0
3 years ago
Banks that are members of the federal reserve have the benefit of?
shusha [124]

Answer:

Earning dividends from stock in the federal reserve

Explanation:

Earning dividends like this can be a small asset over the long period.

5 0
3 years ago
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