1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mr Goodwill [35]
3 years ago
11

Paragraph Styles Rolling Coast Inc. issued BBB bonds two years ago. These bonds provided a yield to maturity (YTM) of 11.5 perce

nt. Long-term risk-free government bonds were yielding 8.7 percent at the time. The current risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the risk- free long-term government bonds are currently yielding 7.8 percent, then at what interest rate should Rolling Coast expect to issue new bonds? Group of answer choices 7.8% 8.79 9.2% 10.2% 12.9%
Business
1 answer:
Karo-lina-s [1.5K]3 years ago
5 0

Answer:

Explanation:

The risk premium two years back = 11.5 - 8.7 = 2.8 %

current risk premium = 2.8/2 = 1.4%

Current risk free bond yields 7.8 %

So Rolling Coast expected rate of interest on bonds = 7.8 + 1.4

= 9.2 %

You might be interested in
Jackson Tires reported net sales of $80 million and total operating costs (including depreciation) of $52 million. Jackson Tires
Roman55 [17]

Answer:

d. 8.18 million

MVA is $380 million

Explanation:

Net residual Income is the value of the firm. All the preferred and required / agreed return on any the funding availed is deducted from the net earning after profit to make the value for the firm. The income purely associated to the firm is considered as the value of the firm.

Earning Before Interest and tax = Net Sales - Operating costs = $80 million - $52 million = $28 million

Net Operating profit after tax = $28 x ( 1 - 40% ) = $16.8 million

Return on investor-supplied capital = $115 million x 7.5% = $8.625 million

Value created for the firm = Net operating profit after tax - Return on investor-supplied capital = $16.8 - $8.625 = $8.175 million = $8.18 million

MVA is the net of market capitalization and stockholders equity of the firm. It is the difference of market value and book value of equity of a firm.

MVA = ( Outstanding shares x Market value of shares ) - Book value od the equity = ( 20 million shares x $25 per share ) - $120 million = $500 million - $120 million = $380 million

6 0
3 years ago
Suppose that, in an attempt to combat severe unemployment, the government decides to increase the amount of money in circulation
ELEN [110]

Answer:

increases

higher

more

lower

lower

Explanation:

If the money supply is increased. individuals would have more money and consumption would increase. Increase in consumption would lead to a rise in demand.

when demand exceeds supply, prices rise,

When there is a rise in price, it encourages producers to increase production in order to increase their profit margin.

In order to expand production, more factors of production would be needed. So, more labour would be hired. thus, unemployment would fall.

it can be seen that higher inflation lowers unemployment

5 0
3 years ago
रचनात्मक र नविन्तम अबधारण लेख्नुहोस। नयाँ ब्यब्साय विभिन्न विधि हरु ब्य्ख्य गर्नुहोस​
dem82 [27]

Answer:

लेख्नुहोस। नयाँ ब्यब्साय विभिन्न विधि हरु ब्य्ख्य गर्नुहोस​

Explanation:

4 0
3 years ago
The managers of a car dealership have decided to utilize the Hawthorne effect to increase productivity, which means using camera
Leokris [45]

Answer:

False

Explanation:

The change in the behaviour of participants when they are aware that they are being observed is called Hawthorne effect. It can be defined as increase in output in response to being watched.

The term emerged with Hawthorne studies that tested the impact of various working condition variables on the productivity of the employees. Although experts do not believe that there was any Hawthorne effect in Hawthorne studies.  

Hawthornian studies began around 1924 at the western Electric plant in Illinois, Chicago.

5 0
4 years ago
3. Which of the following is NOT a factor of production?
Tju [1.3M]

Answer:

Output.

Explanation:

because it is an effect of production but not a factor.

3 0
3 years ago
Read 2 more answers
Other questions:
  • City mission is a not-for-profit organization that provides hot meals, living quarters, and showers for homeless people. based o
    10·1 answer
  • Washington Inc. issued $846,000 of 6%, 20-year bonds at 98 on January 1, 2009. Through January 1, 2017, Washington amortized $9,
    13·1 answer
  • Suppose the following two events occur at the same time: the Chicago Cubs win the World Series, and the workers who make Cubs me
    12·1 answer
  • During last year the price of regular unleaded gasoline in Oakland, California increased 10 percent. If the price elasticity of
    6·1 answer
  • Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish i
    11·1 answer
  • The Coffee Collective is seeking to identify customers who want a unique coffee-drinking experience and are open to a loyalty re
    14·1 answer
  • 4) An investor has $60,000 to invest in a $280,000 property. She can obtain either a $220,000 loan at 9.5 percent for 20 years o
    5·1 answer
  • In which of these areas in the manufacturing and distribution process can a company create sustainability measures? (Select all
    14·1 answer
  • bonds that are purchased with the intent of selling them in the near future to take advantage of short-term price changes are cl
    5·1 answer
  • Mary Beth purchased her primary residence for $280,000.00. As part of the closing procedure, she paid $2,900 in a loan originati
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!