In the united states the largest expenditure component of gdp is

Barnegat Light sold 100,000 shares in an initial public offering. The underwriter's explicit fees were $50,000. The offering pri

Rom4ik [11]

The best estimate of the total cost to Barnegat Light of the equity issue will be $1,050,000.

In addition to the explicit fees of $50,000, we should also take into account the implicit cost incurred to Barnegat Light from the underpricing in the IPO. The underpricing is $10 per share, implying total costs of $1,000,000.

Calculation for What is the best estimate of the total cost to Barnegat Light of the equity issue-:

Total cost = $50,000 + ($30 - $20)1,000,000 shares

Total cost = $50,000+($10)1,000,000 shares

Total cost = $50,000+$1,000,000

Total cost =$1,050,000

Therefore the best estimate of the total cost to Barnegat Light of the equity issue will be $1,050,000.

Learn more about Initial Public Offering (IPO)on:

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5 0

2 years ago

If a new firm was launched to help businesses comply with the affordable care act, that opportunity was created by ________.

vekshin1

That opportunity was created by political actions and regulatory changes, government subsidiaries. An opportunity is a favorable set of circumstances that creates need for a new product service or idea. An opportunity should have essential qualities such as attractive, timely durable and anchored in a product, service or business that adds value for its buyer or end user.

8 0

3 years ago

Discuss the intellectual debates by contemporary scholars surrounding issues of development

r-ruslan [8.4K]

Answer:

Intellectual scholar discuss the issues of development as something arising out of differences between the nature and nurturing given to an individual. They also talk about relative importance of early experiences versus experiences occurring at a later stage in life.

They also talk about sequential development stages with age that cause emergence of certain skills in all individuals. They also talk about various theories such as cognitive theory, developmental theory, Psychoanalytic Theories, Abnormal Behavior vs. Differences etc.

Explanation:

Intellectual scholar discuss the issues of development as something arising out of differences between the nature and nurturing given to an individual. They also talk about relative importance of early experiences versus experiences occurring at a later stage in life.

They also talk about sequential development stages with age that cause emergence of certain skills in all individuals. They also talk about various theories such as cognitive theory, developmental theory, Psychoanalytic Theories, Abnormal Behavior vs. Differences etc.

4 0

2 years ago

Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. T

Ira Lisetskai [31]

Answer:

1.$35,000

2.$6,300,000

Explanation:

The computation of Unit sales to earn the target income and Sales amount at required profit is given below:-

a. Contribution per unit = Unit sale price - Unit variable cost

= $180 - $135

= $45

Unit sales at required profit = (Sales cost + Required cost) ÷ Contribution per unit

= ($562,500 + $1,012,500) ÷ $45

= $1,575,000 ÷ $45

= $35,000

b. Sales amount at required profit = Unit sales at required profit × Unit sale price

= $35,000 × $180

= $6,300,000

8 0

3 years ago

Bond j has a coupon rate of 5 percent and bond k has a coupon rate of 11 percent. both bonds have 13 years to maturity, make sem

aleksley [76]

To find the change in the price of the bonds, first need to find the price of individual Bond.

Bond Price is directly related to the change in the YTM of the bond. If the YTM rises by 2%, the price of the bond will fall.

Bond J :

(WHEN YTM IS 8%)

Coupon Rate: 5%

Coupon Amount (PMT): $1,000 * 5% = $50/2 = $25 (Semi annual coupon amounts)

Number of years (NPER) = 13*2 = 26

YTM (rate) = 8%/2 = 4%

Face Value: $1000

Price (PV0) : ?

To find the price of the bond, can either use excel or with formula.

When input the below formula in excel,

PV =pv(rate,nper,pmt,fv,type)

P0 =pv(4%,26,-25,-1000)

When input the formula in excel, we get PV as $760.26

(WHEN YTM RISES BY 2%, NEW YTM IS 10%)

Coupon Amount (PMT): $25 (Semi annual coupon amounts)

Number of years (NPER) = 26

YTM (rate) = 10%/2 = 5%

Face Value: $1000

Price (PV1) : ?

To find the price of the bond, can either use excel or with formula.

When input the below formula in excel,

PV =pv(rate,nper,pmt,fv,type)

P1 =pv(5%,26,-25,-1000)

When input the formula in excel, we get PV as $640.62

CHANGE IN THE BOND PRICE OF BOND J DUE TO THE CHANGE IN THE YTM

%change = (P1 – P0)/P0

%change = ($640.62 - $760.26)/$760.26

%change = -18.68%

Therefore, with the increase in 2% YTM of BOND J, the price falls by 18.68%

Bond K :

(WHEN YTM IS 8%)

Coupon Rate: 11%

Coupon Amount (PMT): $1,000 * 11% = $110/2 = $55 (Semi annual coupon amounts)

Number of years (NPER) = 13*2 = 26

YTM (rate) = 8%/2 = 4%

Face Value: $1000

Price (PV0) : ?

To find the price of the bond, can either use excel or with formula.

When input the below formula in excel,

PV =pv(rate,nper,pmt,fv,type)

P0 =pv(4%,26,-55,-1000)

When input the formula in excel, we get PV as $1,239.74

(WHEN YTM RISES BY 2%, NEW YTM IS 10%)

Coupon Amount (PMT): $55 (Semi annual coupon amounts)

Number of years (NPER) = 26

YTM (rate) = 10%/2 = 5%

Face Value: $1000

Price (PV1) : ?

To find the price of the bond, can either use excel or with formula.

When input the below formula in excel,

PV =pv(rate,nper,pmt,fv,type)

P1 =pv(5%,26,-55,-1000)

When input the formula in excel, we get PV as $1,071.88

CHANGE IN THE BOND PRICE OF BOND K DUE TO THE CHANGE IN THE YTM

%change = (P1 – P0)/P0

%change = ($1071.88 - $1239.74)/$1239.74

%change = -13.54%

Therefore, with the increase in 2% YTM of BOND k, the price falls by 13.54%

SIMILALRY IF THE BOND PRICES FALLS BY 2%, the YTM WILL BE 6%/2 = 3% **(REFER THE IMAGE ATTACHED)

5 0

3 years ago