Answer: B. 1 DEF Jan 50 Call
Explanation:
The Options Clearing Corporation (OCC) acting under its mandate of being an issuer and guarantor for options and futures contracts can alter options prices but does not do so for prices based on normal dividends as they are more regular and their effects are already accounted for in the price of the call.
When a company calls a one-time special cash dividend, this is new to the market which would not have incorporated it into the price of the call. The OCC will then adjust the price to account for this.
In this case it will do so by subtracting the dividend from the call;
= 55 - 5
= $50
The customer will then have 1 DEF Jan 50 Call
.
Answer:
B) 1%
Explanation:
Taylor's rule formula is as follow:
Target rate = Neutral rate + 0.5 x (Expected GDP growth rate - Long-term GDP growth rate) + 0.5 x (Expected Inflation rate - Target inflation rate)
--> Target rate = 2% + 0.5 x (0) + 0.5 x (0 - 2%)
--> Target rate = 2% - 1% = 1%
Nominal federal funds rate should be 1%
Answer:
5.925%
Explanation:
For computing the cost of debt, first we have to determine the YTM by using the Rate formula that is shown in the attachment
Given that,
Present value = $1,050
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 8% = $80
NPER = 20 year - 1 year = 19 year
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 7.50%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 7.50% × ( 1 - 0.21)
= 5.925%
Answer:
D : Cultural relativism
Explanation:
Cultural relativism is an idea that an action should be viewed in the context of the socio-cultural environment in question. If child labor is permitted in Country X, it implies that rival companies and competitors who use child labor will experience cheaper production cost and unless the multinational company does same, it may face the need to pul out of the market.
<span>Market segmentation is the process of dividing a larger market into smaller groups (segments). </span><span>Marketers segment broad markets into smaller target segments based on a variety of</span> based on meaningfully shared characteristics.
These characteristics can be behavioral, geographic and demographic.
