Coupon rate is the yearly interest earned by a loan and it can be calculated with
where i is the annual interest and p is the par value of the bond or the initial loan amount.
For this particular case, since the semiannual payment is $28.50, then the annual payment is 2 x 28.50 = $57.00.
Thus, we have
From this, the coupon rate is 0.057 x 100% = 5.7%.
Answer: 5.7%
If sales volume increases and all other factors remain constant, then the Margin of safety will increase
Explanation:
The margin for safety (MOS) is described as an overall excess of current or expected revenue, expressed either in terms of currency or in units, or as a percentage of total revenues.
One of the main ways to increase the safety margin is through increasing the gross value per unit (if business conditions are favourable) and by reducing the variable cost per unit of the good. This can be accomplished by rising selling costs.
Answer:
A. An increase in the perceived profitability of Touchtech will likely cause the value of Edison's shares to rise.
B. Expectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Edison's shares to decline
Explanation:
The price of the stock changes only because of the changes in the profitability of the firm. If the company is earning lower profits then the prices of the stock will fall and vice versa. So the option A is correct because increase in profitability increases the value of the shares.
So the main thing here is the profitability of the firm which is affected by the recession in the economy because during the recession period the profitability of the firm decreases and so the value of the stock decreases. So the option B is correct
Answer:
14.925%
Explanation:
Cost of equity = Unlevered Cost of Equity + (Unlevered Cost of Equity - Cost of debt)*Debt to value ratio / (1-debt to value ratio)*(1-Tax rate)
Cost of equity = 12% + (12%-9%)*0.6/(1 - 0.6)*(1 - 35%)
Cost of equity = 0.12 + 0.018/0.4*0.65
Cost of equity = 0.12 + 0.02925
Cost of equity = 0.14925
Cost of equity = 14.925%
So, Alabaster's cost of equity will be 14.925%.
Answer:
B. Imposed Non Exchange Transactions
Explanation:
A non exchange transaction is a form of transaction whereby a party or a group or an individual receives something of value without directly giving value back in exchange. In non exchange transactions, a party gives value to another without directly receiving approximate value in exchanges. Grants, taxes, special assessments, fines and so on are all parts of non exchange transactions. However, taxes and fines are imposed non exchange transactions because they are assessed and not derived from transactions.
