Which of the following is an advantage of consumer credit

Suppose you bought a bond with an annual coupon of 7 percent one year ago for $1,010. The bond sells for $985 today. a. Assuming

butalik [34]

Answer:

(a) $45

(b) 4.45%

(c) 1.41%

Explanation:

a) Dollar return:

= Selling Price - Buying Price + Coupon

= $985 - $1,010 + $70

= $45

b) Rate of return:

= Dollar return ÷ Buy price

= 45 ÷ 1,010

= 4.45%

c) Based on Fisher relation,

(1 + Nominal rate) = (1 + Real rate) × (1 + Inflation)

(1 + 4.45%) = (1 + Real rate) × (1 + 3%)

Therefore,

Real rate = 1.41%

7 0

3 years ago

Which of the following is an example of a career in public safety?

disa [49]

d.police officerrrrrrrrrrrrrr

5 0

3 years ago

Read 2 more answers

In 2005, Skype, a company for making internet phone calls, was purchased by eBay for $2.6B. This is an example of a(n):_______

Lorico [155]

Answer:

d. acquisition

Explanation:

Acquisition can be defined as the process in which a company or business firm purchases all of another company so as to build on its weaknesses or strengths.

This ultimately implies that, after the acquisition of a company's shares or all of the company, the acquiring (purchasing) company gains a total control of the acquired company and as a result it is saddled with the responsibility of controlling, maintaining, managing and financing of the company.

In 2005, Skype, a company for making internet phone calls, was purchased by eBay for $2.6B. This is an example of an acquisition.

4 0

3 years ago

Mickey is a 12-year-old dialysis patient. Three times a week for the entire year he and his mother, Sue, drive 20 miles one way

gavmur [86]

Answer:

The right approach will be "$ 1123.2".

Explanation:

The number of miles to be used will be:

= $40 \ miles \ round \ trip\times 3 \ trips \ per \ week\times 52 weeks$

= $6240 \ miles$

Now,

The item deduction will be:

= $Number \ of \ used \ miles\times 18 \ cents \ per \ mile$

= $6240\times 1123.2$

= $1123.2$ ($)

4 0

3 years ago

You estimate Bayleaf Inc. has free cash flows of $70 million arriving in 1 year, $74 million in 2 years, and $80 million in 3 ye

Tcecarenko [31]

Answer:

If no information of how many years expected for the FCF in Bayleaf, then I assume you expect FCF in 4 years only.

Then the Enterprise Value of Bayleaf is nil, since its valuation is negative of roughly $19,871.

However if we expect to have FCF in 20 years, in which the growth rate of FCF in year 4th is 3% year on year, then the valuation of Bay Leaf Inc. is roughly $347 million.

Explanation:

The valuation of enterprise is Net present value (NPV) of Free Cash Flow (FCF) minus its Net Debt

In the NPV, the discount rate is weighted average cost of capital (WACC); thus we can calculate NPV of FCF in Bayleaf by this function in excel = NPV(14%,70000,74000,80000) = $221,129,242

Then the valuation of company if considering FCF in 4 years is ($19,871)= NPV of FCF – Net Debt = $221,129,242 - $241,000,000

Please see excel attached for your details.

Download xlsx

5 0

3 years ago