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oksian1 [2.3K]
3 years ago
8

How does a bond issuer decide on the appropriate coupon rate?

Business
1 answer:
allochka39001 [22]3 years ago
3 0
Bond issuers look at outstanding bonds of similar maturity and risk. The yields on such bonds are used to establish the coupon rate necessary for a particular issue to initially sell for par value. Bond issuers also simply ask potential purchasers what coupon rate would be necessary to attract them.The coupon rate is fixed and simply determines what the bond’s coupon payments will be. 
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The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected
iVinArrow [24]

Answer:

the annual after-tax cost of financing the purchase of the home is $23,638.40

Explanation:

The computation of the annual after-tax cost of financing the purchase of the home is shown below:

= Installment amount - tax saving

= $33,200 - ($29,880 × 32%)

= $33,200 - $9,561.60

= $23,638.4

hence, the annual after-tax cost of financing the purchase of the home is $23,638.40

We simply applied the above formula

6 0
3 years ago
What is the principle of quality? What is the principle of quantity? Give an example in which a physical activity professional w
QveST [7]

Answer:

The principle of quality states that the experiences that engage us in the most critical components of an activity are most likely to increase our capacity to perform that activity. Critical components are the elements of an activity that are most important for performing it at a high level. To be really good at an activity, you must focus on what factor you need most and improve that area.The principle of quantity states that when all other factors are equal, increasing the frequency of our engagement with the critical components of an activity usually  

results in the largest performance improvement in that activity. Generally, the performer whose experiences have engaged her most often in the critical components of an activity usually becomes the most competent in that activity.A physical activity professional asked to create a plan to decrease the time in a marathoner’s performance would begin by conducting a analysis. The critical components in this activity relate to physical performance capacity more than skill.  

Explanation:

4 0
3 years ago
Marlin Steel Wire Products is a manufacturer of commodity wire products out of Baltimore, MD. Marlin has many rivals based in Ch
Ostrovityanka [42]

Answer:

<em>Focus Strategy</em>

Explanation:

Focus Strategy <em>is a marketing strategy in which a business focuses its resources on entering or expanding into a narrow segment of the market or industry.</em>

Usually a focus strategy is used where the company knows its section and has products to meet its needs competitively.

Focus strategy is one of three strategies for generic marketing.

7 0
4 years ago
You are the manager of a gas station in a small town, and your goal is to maximize profits. Based on your experience, the elasti
Levart [38]

<span>a. </span>No. Since the good that I am selling is inelastic considering the elasticity given in and outside Texas, having a lower price than non-Texan gas stations would have less impact on the quantity demanded.

<span>b. </span>The profit-maximizing price to charge a Texan for a car wash would be $12.

<span>c. </span><span>The profit-maximizing price to charge a Californian for a car wash would be $18. </span>

<span>(See attached for the calculations.)</span>

Download docx
7 0
4 years ago
Suppose a decrease in the supply of bottled water resulted in a decrease in revenue. This indicates that A. the demand for bottl
Flauer [41]

Answer:

D. the demand for bottled water is price elastic in the price range considered.

Explanation:

  • <u>Demand elasticity</u> can be express as the sensibility of change in the demanded quantity when prices change.
  • Mathematically , can be written as \eta=\frac{\triangle Q\%}{\triangle P\%}  =\frac{\partial{Q^d}}{\partial{P}} \times{\frac{P}{Q} }, where P is the price and Q is the quantity demanded. This means that elasticity reflects what is the percentage change in quantity \triangle Q\% in the presence of a percentage change \triangle P\% in prices.
  • A <u>decrease in supply would tipically rise prices</u>, ceteris paribus.
  • If the <u>decrease in supply was the cause of a decrease in revenues,</u> it means that the <u>percentage change in demanded quantity as a consequence of the rise in prices was bigger than the change in prices.</u>
  • To see it more clearly, remember that the seller's revenue can be express as revenue=P\times{Q}. If prices increased, but revenues fall, then Q decreases in a bigger percentage than the increased in prices.
  • If \triangle Q\%>\triangle P\%, then \eta>1, wich is consistent with an elastic range of demand.
5 0
4 years ago
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