Complete question:
Security Term (years) Yield (%)
Treasury 2 0 5.5%
AAA Corporate 2 0 7.0%
BBB Corporate 20 8.0%
B Corporate 2 0 9.6%
Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt Oil believes it can get a BBB rating from Standard and Poor's for this bond issue. If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to:
A) $891 B) $901 C) $1,000 D) $800
Answer:
If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901
Solution:
Given,
FV = 1000,
N = 40,
I = 4,
PMT = 35
Compute PV ,
PV =
PV = 901.04
If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901
Answer:
c) A heuristic
Explanation:
Price is a decision heuristic a shortcut to simplify and shorten the decision process. You get what you pay for is related to this heuristic.
Answer:
Leadership within a project team should be demonstrated only by the project manager. ... When many members of the project team disagree, then it may be best to delay the decision, gather more data, or agree to let one or two team members investigate and recommend a strategy for the whole team