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kumpel [21]
4 years ago
14

TL Company has expected earnings of $75 in one year if it does well and $25 if it does poorly. The firm has outstanding debt of

$50 that is due in one year. However, given the financial distress costs, the debtholders will only receive $40 in one year if the firm does well and $15 if it does poorly. There is a 60 percent chance the firm will do well and a 40 percent chance that it will do poorly. What is the current value of the debt if the interest rate on bonds is 8 percent
Business
1 answer:
Juliette [100K]4 years ago
3 0

Answer:$27.78

Explanation:

Expected value of debt after one year = (40* .60)+(15*.40)

= 24 + 6

=$ 30

Current value of debt = Value at 1year / (1+r)^n

= 30/ (1+.08)^1

= 30 / 1.08

=$ 27.78

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Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of al
kow [346]

Answer:

a. Four-firm concentration ratio is the total sales percentage of the top 4 burger shops in the industry;

= 25% + 24% + 18% + 12%

= 79%

b. Herfindahl index is the sum of the squares of the percentage sales of all the shops in the industry;

= 25² + 24² + 18² + 12² + 11² + 6² + 4²

= ‭1,842‬

c. Top 3 shops combine to form one shop.

= 25 + 24 + 18

= 67%

Four-firm ratio = 67% + 12% + 11% + 6%

= 96%

‭Herfindahl index = 67² + 12² + 11² + 6² + 4²

= ‭4,806‬

8 0
3 years ago
Which of the following statements are true about organizational culture? Check all that applya. Employees may be unaware of the
erma4kov [3.2K]

Answer:

statements "a" "b" and "d" are true

Explanation:

The <u>statements "a" "b" and "d" are true</u> because employees may be uninformed of the underlying hypotheses that supervise an organization's culture. Culture can generate ambitious resources for a company. The actions managers exert can improve a company's culture. Organizational culture encompasses values and practices that provide the different social furthermore psychological situation of a company. The organizational culture changes the way people communicate, the circumstances within which culture is created, the revolution they will have towards specific changes, and presently the way they participate.

6 0
4 years ago
It is possible to observe a positive nominal interest rate together with a negative real interest rate. a. True b. False
grigory [225]

It's possible to have a positive nominal interest rate with a negative real interest rate. Therefore, it's true.

<h3>What is real interest rate?</h3>

It should be noted that the real interest rate is the interest rate that has been adjusted for inflation.

The nominal interest rate hasn't been adjusted for inflation. It's possible to observe a positive nominal interest rate together with a negative real interest rate.

Learn more about interest rates on:

brainly.com/question/25720319

5 0
3 years ago
The New York Stock Exchange (NYSE) originated as: a financial market where nearly 100 million shares of stock are traded every b
ivanzaharov [21]

Answer:

The answer is: A) A financial market, where nearly 100 million shares of stocks are traded every business day.

Explanation:

The NYSE was founded on May 17, 1792 by twenty four stockbrockers on Wall Street, New York City.

The NYSE is the largest stock exchange in the world, listing over 9.3 million stocks and securities every day.

Once a company registers with the NYSE, their stock become available for public trading. Both physical (a trader doing his job) and digital (remotely by computer) trades can take place.

It also provides several market indexes:

  • the Dow Jones Industrial Average,
  • the S&P 500,
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  • NYSE US 100 Index,
  • the NASDAQ Composite
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4 0
4 years ago
Juan buys gas at the gas station. The gas station submits funds for road maintenance. What type of tax is this? (5 points)
prisoha [69]

Answer:

Indirect taxes

Explanation:

Indirect taxes are the taxes levied on transactions as opposed to direct taxes that are imposed on incomes. An indirect tax is added to the prices of goods and services and collected by the seller or retailer. The retailer acts as the tax intermediary and submits the taxes collected to the government.

Examples of Indirect taxes include excise duty tax, value-added tax, and sales tax.  Gas attracts sales tax and road maintenance tax. These taxes increase the price of gas, making them indirect taxes.

6 0
3 years ago
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