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Juli2301 [7.4K]
3 years ago
13

Suppose the risk-free rate is 3.5%; on average, an AAA-rated corporate bond carries a credit spread of 0.3%, an A-rated corporat

e bond carries a credit spread of 1.1%, and a B-rated corporate bond carries a credit spread of 3.9%. Company XYZ's outstanding debt is rated BBB by rating agencies. What would be the cost of debt for XYZ based on prevailing market rates? Multiple Choice
A .4%
B .5%
C .8%
D .6%
Business
1 answer:
KIM [24]3 years ago
3 0

Answer and Explanation:

The answer given in the question are not correct. Following should be the choices:

A: 6.5%

B: 7.4%

C: 3.8%

D: 4.6%

The correct answer is A. 6.5 %

The reason is:

3.5% x 1.1% = 4.6%

3.5% + 3.9% = 7.4%

It has to be in between this which is,

4.6% < 6.5% < 7.4%

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Sutton Enterprises makes gadgets using a two-step process that involves machining and assembly, respectively. During the period,
MaRussiya [10]

Answer:

Total equivalent units= 11,890

Explanation:

Giving the following information:

Assembly Department completes 10,200 gadgets and transfers them to Finished Goods Inventory.

The Assembly Department has 2,600 gadgets in the process that are 65% complete for conversion.

<u>To calculate the equivalent units, we need to multiply the % complete for the number of units started:</u>

Units completed= 10,200

Units in ending inventory= 2,600*0.65= 1,690

Total equivalent units= 11,890

5 0
3 years ago
A thief steals an ATM card and must randomly guess the correct three​-digit pin code from a 9​-key keypad. Repetition of digits
ololo11 [35]

Answer:

The thief has a 0.11% probability of hitting the pin code on the first try.

Explanation:

Simply, if the ATM card has a 3-digit code that can be repeated, and the board has 9 numbers (for example, from 1 to 9), we must start from the smallest number that could be formed with these numbers to the highest number that these numbers could also compose, which in the case would be 111 and 999. Then, 889 different numbers could be formed (it is the distance between 111 and 999), with which the possibility of hitting the key to the first attempt would be 1 in 889 times, or 1/889.

To take the probability to a percentage, we must know that 889 / 8.89 gives 100. Therefore, dividing 1 / 8.89 we will know the percentage of probabilities of hitting the key on the first attempt: 1 / 8.89 = 0.11.

This shows us that the thief has a 0.11% probability of hitting the key on the first try.

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