Answer:
By January 1, 2006 the price of the bonds=$50.675 M
Explanation:
The price of a bond at any given time can be expressed as;
Current price=(Annual coupon×((1-(1/(1+r)^i)/r)+ (face value/(1+r)^i)
where;
i-maturity period, from 2005-2006=1 year
r-nominal yield to maturity rate=8%
coupon rate=10%
face value=$50 M
Annual coupon=(10/100)×50 M=5 M
replacing;
Current price=Annual coupon×((1-(1/(1+r)^i)/r + face value/(1+r)^i
(5 M×((1-(1/(1+0.08)^1)/0.08)+50/(1+0.08)^1
(5 M×(1-0.93)/0.08)+46.3
(5×0.875)+46.3=4.375+46.3=50.675 M
By January 1, 2006 the price of the bonds=$50.675 M
Answer:
The stock price is 38.63
Explanation:
We use the gordon model to calculate the horizon value and with htat the value of the stock:
D1 = 2.60 x 1.04 = 2.704
rate of return 11% = 0.11
grow rate = 4% = 0.04
P0 = 38.62857143
The taxes should be ignored as the gordon model do not include them in the calculations
Answer:
$167,098
Explanation:
The computation of the total materials handling cost allocated to the modular homes is shown below:
= Total material handling cost × expected modular homes ÷ total expected material moves
= $210,420 × 540 ÷ (540 + 140)
= $167,098
Answer and Explanation:
The quantity theory of money talks about money supply and price level, and their relationship with one another.
In any given economy, the quantity Theory of money states that money supply and price level are directly proportional. This is to say that when there is a change such as an increase in money supply, there would also be a proportional increase in price Ievel. Also when there is an increase in price level, there would also be a proportional increase in money supply.
