Answer:
a. $880.74
b. 13 years
Explanation:
a. Conversion ratio = Current Value of bond / Conversion price = 1,000 / 93.4 = 10.71
Conversion price of bond = 10.71 × 28.60 = $306.31
Coupon = Par value of bond * Coupon rate = $1,000 * 6.4% = $64
Present value of straight debt is calculated below:
Present Value = $64 × [1-(1+7.4%)^-30 / 7.4%] + [$1,000 / (1+7.4%)^30]
= $64*11.93 + $117.46
= $763.28 + $117.46
= $880.74
.
Therefore, the minimum value of bond is $880.74
b. Conversion ratio = 10.71
Current stock price = $28.6
Suppose number of year the stock will take to reach above $1,140 is t.
Conversion value = Current stock price * Conversion ratio*(1+10.8%)^t
$1,140 = $28.6 * 10.71 * (1.108)^t
(1.108)^t = 3.7218
t = 12.8145 year.
t = 13 years
Answer:
Ans. The after-tax rate of return on the municipal bonds is 3% and the after tax rate of return on the corporate bonds is 4.5%
Explanation:
Hi, the formula to find the after-tax rate of return of any taxable income is as follows.
Therefore, in the case of the municipal bond.
So, the after-tax rate of return of the municipal bond is 3%.
And for the corporate bond is.
And the after-tax rate of return of the corporate bond is 4.5%.
It means that taxes on municipal bonds are:
In the case of municipal taxes:
1% taxes for municipal bonds
In the case of corporate taxes:
1.5% taxes for corporate bonds
Best of luck.
Answer: See explanation
Explanation:
1. Yes.
A design defect is when the design for a particular product brings about risk or injury which could have been averted if the design was done in another way.
With regard to the question, there is a design defect as we're informed that the drain cover becomes loose and we're further told that Sta-Rite did not install safety features on its drain pumps.
2. No.
Based on the scenario in the question, the ethical duty wasn't met by Sta-Rite Industries. They neglected the potential injury and harm that their design would cause. This means that they didn't perform their ethical duty well.
3. Yes.
In this case, Sta-Rite has to compensate the affected person and a punitive damage should further be added to whatever compensation had been put in place. This will serve as a way of making others also learn and always do the right thing and be safety conscious.
Answer:
$13
$9
Explanation:
Total surplus is the sum of consumer surplus and producer surplus.
Consumer surplus is the difference between the willingness to pay of a consumer and the price he pays for the good.
Consumer surplus = willingness to pay - price of the good
Producer surplus is the difference between the least amount a seller is willing to sell his product and the price he sells the product.
Producer surplus = price of the good - least price the seller is willing to sell his product
Total surplus = consumer surplus + producer surplus
Total surplus = willingness to pay - price of the good + price of the good - least price the seller is willing to sell his product
Prices cancel out
Total surplus = willingness to pay - least price the seller is willing to sell his product
A. Total surplus = $18 - $5 = $13
B. Total surplus = $16 - $7 = $9
I hope my answer helps you
