How can tax and laws effect a business

Laurel, Inc., and Hardy Corp. both have 7 percent coupon bonds outstanding, with semiannual interest payments, and both are pric

cestrela7 [59]

Answer:

Laurel bond % change = -6.6%

Hardy bond % change = -16.3%

Explanation:

current bond price $1,000

interest rate 7%

Laurel bond matures in 4 years, 8 semiannual payments

Hardy bonds matures in 15 years, 30 semiannual payments

if market interest increases to 9%

Laurel bond:

$1,000 / (1 + 4.5%)⁸ = $703.19

$35 x 6.59589 (annuity factor, 4.5%, 8 periods) = $230.86

market price = $934.05

% change = -6.6%

Hardy bond:

$1,000 / (1 + 4.5%)³⁰ = $267.00

$35 x 16.28889(annuity factor, 4.5%, 30 periods) = $570.11

market price = $837.11

% change = -16.3%

3 0

4 years ago

Which of the following is true of a person with a high credit score?

dsp73

Your credit score is used as indicator of your creditworthiness. This means how likely you are to pay off debts and other financial obligations. A person with a high credit score should have a high credit worthiness, or likelihood to be responsible with credit.

A person who pays bills on time has demonstrated that she takes her financial obligations seriously, and this trait positively affects her credit score. The answer is A.

B and C would most likely be associated with a person with a low credit score, since they demonstrate lower creditworthiness.

5 0

3 years ago

Read 2 more answers

If many banks fail, this is likely to: A) increase the ratio of currency to deposits. B) decrease the ratio of currency to depos

alex41 [277]

Answer:

A - Increase the ratio of currency to deposits

Explanation:

when banks are failing people will start having doubts about the banks resulting in not trusting their operations.This occurence will make people keep their monies

4 0

3 years ago

The nation of Newbie is establishing its monetary system and is designing its currency. The first proposal is to issue the Newbi

aliya0001 [1]

Answer:

The answer is yes, it will function as a medium of exchange.

Explanation:

Money has three functions, store of value, unit of account and medium of exchange. Money that can be used as a medium of exchange is money that is accepted as such by both buyers and sellers, and that is comfortable, or convenient enough, to be carried and exchanged

In this example, the nation of Newbie will issue a currency that can be easily transported. While heavy stock cardboard is a little bit heavier than the paper in which most modern-day currencies are printed, the weight is still light, and does not impede easy transportation and exchange of the currency bills.

Besides, the new Newbie Nugget will be what is know was the legal tender of the nation. The legal tender is the currency that a specific country accepts to collect taxes. This gives more legitimacy to Newbie Nugget and makes it a classical example of a medium of exchange.

3 0

4 years ago

In your own words, how do you define the concept of economics? Describe some

Andreas93 [3]

Answer:

Explanation:

Economics is a social science needed with the production, distribution, and consumption of goods and services. It studies how we, businesses, governments, and nations make choices about how to assign resources.

8 0

4 years ago