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IRINA_888 [86]
4 years ago
8

Suppose that General Motors Acceptance Corporation issued a bond with 10 years until​ maturity, a face value of $ 1 comma 000​,

and a coupon rate of 7.0 % ​(annual payments). The yield to maturity on this bond when it was issued was 6.0 %. What was the price of this bond when it was​ issued?
Business
1 answer:
astraxan [27]4 years ago
8 0

Answer:

$1,073.60

Explanation:

bond's current price = PV of face value + PV of coupons

maturity = 10 years

face value = $1,000

coupon rate = 7% annual

market rate = 6%

PV of face value = $1,000 / (1 + 6%)¹⁰ =$558.39

PV of coupons = coupon x annuity factor (10 years, 6%) = $70 x 7.3601 = $515.21

market value at issue date = $558.39 + $515.21 = $1,073.60

since the bond's coupon rate was higher than the market rate, the bond was sold at a premium.

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Which of the following is true?a. It is possible for total utility to rise as marginal utility falls. b. Marginal utility is the
Serga [27]

Answer:

The correct answer is letter "D": A and C.

Explanation:

Utility is the satisfaction or joy an individual perceives by consuming a given good or service. Marginal utility is the satisfaction perceived by consuming one more unit of a good or receiving a service one more time. Total utility is the aggregate utility as a result of adding the number of goods or services consumed.

<em>When marginal utility starts falling, total utility could still be rising since even if the consumer is not enjoying the same way the consumption of a good the individual is still adding more units to the consumption. However, there will a point in which the consumption of the good will not represent any satisfaction to the individual not adding more units anymore, thus, total utility starts dropping.</em>

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4 years ago
PLEASE HELP ASAP (EASY)
butalik [34]

Answer:

2

Explanation:

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3 years ago
The nation of Ectenia has 20 competitive apple orchards, which sell apples at the world price of $2 per apple. The following equ
Phoenix [80]

The  market's labor demand is L=500−2.5W

Since labor demand as a function of the daily wage is L 50-0.25W.

Hence,

The individual labor demand curve is: L=50−0.25W

Now let determine The market labor demand curve

The market's labor demand is :

L=10(50−0.25W)

L=500−2.5W

Inconclusion The market's labor demand is L=500−2.5W

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brainly.com/question/13540328

4 0
3 years ago
B&amp;T Company's production costs for May are: direct labor, $16,000; indirect labor, $6,800; direct materials, $15,300; proper
schepotkina [342]

Answer:

B&T Company's factory overhead incurred for May is $8,890

Explanation:

Manufacturing overhead is all indirect costs incurred during the production process, includes indirect labor cost.

In B&T Company,

Factory overhead incurred for May = Indirect labor cost + property taxes on production facility cost + factory heat, lights and power cost + insurance on plant and equipment cost = $6,800 + $830 + $1,030 + $230 = $8,890

6 0
3 years ago
The market capitalization rate on the stock of Aberdeen Wholesale Company is 10%. Its expected ROE is 12%, and its expected EPS
Shalnov [3]

The Price-earnings ratio of Aberdeen Wholesale Company equals to 14.29.

<h3>What is a P/E ratio?</h3>

Its means the Price-earnings ratio which is used to value a companies by comparing the company's share price to its earnings per share.

<u>Given data</u>

Market capitalization rate = 10%

Expected ROE = 12%

Expected EPS = $5

Plowback ratio is 60%

<h3>What is the Dividend payout ratio?</h3>

= 1 - 0.6

= 0.4

<h3>What is the Expected dividend?</h3>

= 0.4 × $5

= $2

<h3>What is the Growth rate?</h3>

= 0.6 * 12%

= 7.2%

<h3>What is the Firm Value?</h3>

= $2 / (0.10 - 0.072)

= $2 / 0.028

= $71.43

<h3>What is the P/E ratio?</h3>

= $71.43 / $5

= 14.286

= 14.29

Hence, the Price-earnings ratio of Aberdeen Wholesale Company equals to 12.5.

Therefore, the Option D is correct.

Read more about Price earnings ratio

<em>brainly.com/question/14690388</em>

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2 years ago
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