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oksano4ka [1.4K]
2 years ago
5

What are all of the private loans that people have that aren't secured by real estate?

Business
1 answer:
Levart [38]2 years ago
8 0
I would say business loan
You might be interested in
A(n) 11.0​%, ​25-year bond has a par value of​ $1,000 and a call price of ​$1 comma 025. ​(The bond's first call date is in 5​ y
mixas84 [53]

Answer:

the formula to calculate yield to maturity (YTM) is:

YTM = [C + (F - P)/n] / [(F + P)/2]          

  • F = face value
  • P = market price
  • n = number of years x 2 =
  • C = coupon      

the formula to calculate yield to call (YTC) is:

YTC = [C + (F - CP)/n] / [(F + CP)/2]      

  • F = face value
  • CP = call price
  • n = number of years x 2 =
  • C = coupon      

the formula to calculate current yield is:

Current yield = C / P

  • C = coupon
  • P = market price

A)

25 year bond, $1,000 face value, semiannual coupons, 11%, call price $1,025, market price $1,150:

YTM = [C + (F - P)/n] / [(F + P)/2]          

  • F = 1,000
  • P = 1,150
  • n = number of years x 2 = 25 x 2 = 50
  • C = 55      

YTM = [55 + (1,000 - 1,150)/50] / [(1,000 + 1,150)/2] =  [55 - 3] / 1,075 = 0.04837 or 4.84%  

YTC = [C + (F - CP)/n] / [(F + CP)/2]      

  • F = 1,000
  • CP = 1,025
  • n = number of years x 2 = 5 x 2 = 10
  • C = 55      

YTC = [55 + (1,000 - 1,025)/10] / [(1,000 + 1,025)/2] = [55 -2.50] / [1,012.50] = 0.05185 or 5.19%

Current yield = C / P

  • C = 55
  • P = 1,150

Current yield = 55 / 1,150 = 0.0478 or 4.78%

The highest value is the Yield to Call (5.19%) while the lowest value is the current yield (4.78%). Since the bonds were sold at a premium, the coupon rate is higher than the market rate, therefore, it is likely that the company will actually call them. So we should use the yield to call value.

B)

25 year bond, $1,000 face value, semiannual coupons, 11%, call price $1,025, market price $800:

YTM = [C + (F - P)/n] / [(F + P)/2]          

  • F = 1,000
  • P = 800
  • n = number of years x 2 = 25 x 2 = 50
  • C = 55      

YTM = [55 + (1,000 - 800)/50] / [(1,000 + 800)/2] =  [55 + 4] / 900 = 0.06555 or 6.56%  

YTC = [C + (F - CP)/n] / [(F + CP)/2]      

  • F = 1,000
  • CP = 1,025
  • n = number of years x 2 = 5 x 2 = 10
  • C = 55      

YTC = [55 + (1,000 - 1,025)/10] / [(1,000 + 1,025)/2] = [55 -2.50] / [1,012.50] = 0.05185 or 5.19%

Current yield = C / P

  • C = 55
  • P = 800

Current yield = 55 / 800 = 0.06875 or 6.88%

The highest value is the current yield (6.88%) while the lowest value is the Yield to Call (5.19%). Since the bonds were sold at a discount, the coupon rate is lower than the market rate, therefore, it is not likely that the company will actually call them. So we should use the yield to maturity value.

5 0
3 years ago
You know the _____ method of budgeting is being employed after hearing an experienced marketing department manager respond to a
Marianna [84]

Answer:

Arbitrary allocation.

Explanation:

Arbitrary allocation is a method where costs budgeted are not based on any precise measurement,hence accurate costs could not be arrived at.

This approach to budgeting breeds inefficiencies as the accurate budgeting is expected to lead to accurate costing of products as well as pricing.

All in all,the true profitability of a business cannot be ascertained.

Finally,the organization adopting this type of approach needs to change to other accurate methods of budgeting such incremental or rolling budgeting.

3 0
3 years ago
Read 2 more answers
How walmart motivate thier employees?
dybincka [34]
They offer a Extrinsic reward, it’s a reward such as money gifts and recognition. This reward is used by Walmart to motivate their workers for extrinsic motivation Walmart to encourage their workers through health care benefit and financial benefit.
3 0
3 years ago
Elly owns a small coffee shop. She has only one employee. One weekend, she decided to take a break from work. She is wondering w
yanalaym [24]

Answer: (B) Backward induction

Explanation:

 The backward induction is basically used for making the decisions and it is the process of solving the various types of problems by determining the action properly.

In any type of situation, the backward induction basically used the optimal strategy type for making some effective result of the given situation.

According to the given scenario, Elly should use the backward induction process for making the decisions more effectively regarding her shop.

Therefore, Option (B) is correct.

4 0
3 years ago
The following inventory valuation errors have been discovered for Knox Corporation:
Whitepunk [10]

Answer:

Income +/- inventory adjustment

2015:   138,000 - 23,000 = 115,000

2016:  254,000 + 61,000 = 315,000

2017:   168,000 + 17,000 = 185,000

Explanation:

<u>Inventory Identity:</u>

Beginning + Purchases = Ending + COGS

As the mistake is on the right side it compensates by the other component which is COGS

<u><em>When the inventory is overstated</em></u> this means COGS is understated.

We didn't record the cost of good sold thefore our gross profit is higher making the net income higher.

<u><em>When the inventory is understated</em></u> this means COGS is overstated.

We record more cost of goods sold thefore our gross profit is lower making the net income fewer as well.

7 0
3 years ago
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