In economics, free contract is the concept that people may decide what agreements they want to enter into. Acontract may be described as freewhen it is free from force or fraud.
Answer:
The bond's issue (selling) price = $1,146,890.2
Explanation:
The selling price of the bond is equivalent to the present value of all the cash flows that are likely to accrue to an investor once the bond is bought. These cash-flows are the periodic coupon payments that are paid semi anually and the par value of the bond that will be paid at the end of the 10 years.
During the 5 years, there are 10 equal periodic coupon payments that will be made. In each year, the total coupon paid will be 
and this payment will be split into two equal payments equal to 
. this stream of cashflows is an ordinary annuity
The periodic annual market rate is equal to 
The PV of the cashflows = PV of the coupon payments + PV of the par value of the bond
=$80,250*PV Annuity Factor for 10 years at 6.5% + 
Answer:
1. Measure of the percentage change in earnings before interest and tax or operating cash flow:
B) Degree of operating leverage
2. P/E Ratio of 10 indicates that:
c. The value of the stock will be 10 times the initial investment at the time of maturity.
Explanation:
Company B's degree of operating leverage is the financial measure that shows the degree of change of the operating income of the company in relation to a change in her sales revenue. With this measure, investors and analysts of Company B are able to evaluate how sales impacts the company's operating income. There are many ways to measure a company's degree of operating leverage. One of the methods subtracts the variable costs of sales and divides that number by sales minus variable costs and fixed costs.
Company A's P/E ratio or price/earnings ratio is the measure of the relationship between the current market price and its earnings per share. It is used to evaluate the value of the company's stock. It points out whether the company's stock is undervalued, overvalued, or correctly valued.
