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yan [13]
3 years ago
9

In order to accurately assess the capital structure of a firm, it is necessary to convert its balance sheet figures from histori

cal book values to market values. KJM Corporation's balance sheet (book values) as of today is as follows: Long-term debt (bonds, at par) $23,500,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $39,500,000 The bonds have a 8.3% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 11%, so the bonds now sell below par. What is the current market value of the firm's debt?
Business
1 answer:
pychu [463]3 years ago
8 0

Answer:

$19,708,745

Explanation:

We first have to calculate the present value of the bonds:

Nper = 20 (10 years x 2 payments per year)

R = 11% / 2 = 5.5%

Payment = 83 / 2 = 41.50

Future value = 1,000

PV = ?

To calculate the present value we can use an excel spreadsheet and the present value function =PV(5.5%,20,41.5,1000) = $838.67

Now we calculate how many bonds were issued = $23,500,000 / $1,000 = 23,500 bonds.

To determine the market value of the debt outstanding we multiply the present value of the bonds times the total number of bonds outstanding

= $838.67 x 23,500 = $19,708,745

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Answer:

a financial checkup should be completed annually.

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2 years ago
In order to make sure that audiences can correctly identify your mood and attitude during speech, it is necessary to make sure y
BabaBlast [244]
The correct answer for the question that is being presented above is this one: "c. Intonation." <span>In order to make sure that audiences can correctly identify your mood and attitude during speech, it is necessary to make sure you have correct intonation.</span>
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<span>a. Enunciation
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5 0
2 years ago
Read 2 more answers
scenarios as examples of elastic, inelastic, or unit elastic demand. When Ruko, a device used to stream movies at home, increase
kenny6666 [7]

Answer:

Elastic demand

Unit elastic demand

Inelastic demand

Explanation:

Elasticity of demand measures the degree of responsiveness of quantity demanded to changes in price.

Elasticity of demand = percentage change in quantity demanded/ percentage change in price.

Denand is elastic if when price is increased, the quantity demanded changes more than the increase in price. Quanitity demanded is more sensitive to changes in price.

If price is increased, the quantity demanded falls and as a result the total revenue earned by sellers falls.

The elasticity of demand is usually greater than 1 when demand is elastic.

Demand is unit elastic if a change in price has the same proportional change on quantity demanded. The coefficient of elasticity is equal to one.

If price is increased, the quantity demanded changes by the same proportion so there's no change in total revenue of sellers.

Demand is inelastic if a change in price has little or no effect on quantity demanded.

Coefficient of elasticity is usually less than one.

If price is increased, there is little or no change in the quantity demanded and as a result the revenue earned by sellers increase.

I hope my answer helps you

3 0
3 years ago
Chase believes that most of his subordinates dislike work and would avoid it if possible. He also believes that his employees ha
Mice21 [21]

Answer: Option B

                               

Explanation: In simple words, theory X refers to the type of management style under which the manager have a perception that his or her subordinates are incompetent employees with less motivation  and irresponsible nature.

These managers strictly monitors their subordinates and use aggressive style of management to get work done. Under such management style the delegation of authority and decentralization does not takes place.

Generally, the relationship of such managers with their subordinates are very formal and remains occupied within the firm. Under such management style all the employees have to work by following a predetermined framework and there is very less flexibility in the job.

5 0
3 years ago
The next dividend payment by ZYX, Inc., will be $2.95 per share. The dividends are anticipated to maintain a 4 percent growth ra
Alona [7]

Answer:

9.09%

Explanation:

The required return of  ZYX, Inc shall be determined using the following mentioned formula:

r=[d(1+g)/MV]+g

In the given question

r=required rate of return of ZYX, Inc=?

d(1+g)=next dividend payment to be made by the ZYX, Inc=$2.95

MV=current selling price of share=$58

g=growth rate of dividend=4%

r=required rate of return=[$2.95/$58]+4%

r=required rate of return=9.09%

6 0
2 years ago
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