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tatyana61 [14]
3 years ago
7

Given the following information, what is the market value of XYZ Corporation?Common stock 13.6 million shares outstanding, selli

ng at $31 per shareBond issue 1 $600 million total face value, selling at 98 percent of parBond issue 2 $150 million total face value, selling at $950 per bondA) $697.52 millionB) $874.82 millionC) $987.24 millionD) $1,049.43 millionE) $1,152.10 million
Business
1 answer:
Yanka [14]3 years ago
8 0

Answer:

option (E) $1,152.10 million

Explanation:

Data provided in the question:

outstanding Common stock = 13.6 million shares

Selling price = $31 per share

Total face value of bond Issue 1 = $600 million

selling at 98% of par

Total face value of bond Issue 2 = $150 million

selling at $950 per bond

Now,

Shareholder’s equity = Share selling price × number of shares outstanding

= $31 × 13.6 million

= $421.60 million

Value of bond 1 = Total face value × price %

= $600 million × 98%

= $588 million

Value of bond 2 = ( Total face value × price) ÷ 1000

= ( $150 million × 950 ) ÷ 1000

= $142.50 million

Therefore,

Market value of firm = $421.60 million + $588 million + $142.50 million

= $1,152.10 million

Hence,

The correct answer is option (E) $1,152.10 million

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Based on the fact that the demand elasticity is 0.91, the revenue-maximizing decision would be to d. increase tuition, which would generate more revenue.

<h3>Why is this the revenue-maximizing decision?</h3>

When the demand elasticity is below 1 as is the case here, it means that demand is inelastic.

When demand is inelastic, an increase in price will lead to a lower decrease in demand. This means that increasing prices for enrollment in this college will bring in revenue because there won't be much change in demand.

In conclusion, option D is correct.

Find out more on demand elasticity at brainly.com/question/6791468.

6 0
2 years ago
MMS Corp borrows $1,650,000 today for a new building. The loan is an equal principal payment loan with an APR of 6.5% compounded
astraxan [27]

Answer:The Current Portion of debt in month 16 is $1461958.53 (rounded off to two decimals)

Explanation:

The question requires us to calculate the balance of the loan in 16 months time. The Balance of the Loan is calculated by taking the loan amount and calculates the Future Value of the amount (in 16 months) and subtract the Future Value of Monthly Loan Payments.

The Monthly Payments were not provided in the question so the first thing we need to do is to calculate monthly payments

Loan Amount = $1650 000

Interest Rate (r) = 6.5/12 .Interest rate is compounded monthly there for the annual Percentage rate of Interest must be divided by 12

Period (N) = 9 years x 12 = 108 months

Monthly Payments Formulae = (r)Loan Amount/(1 -(1 + r)^-n)

Monthly Payments = (0.065/12)1650 000/(1 - (1 + 0.065/12)^-108)

Monthly Payments = 8937.49989/0.4420139495

Monthly Payments = 20219.949846

MMS Corp would pay $20219.949846 for the loan. we will not round of this answer because we want to get an accurate answer wen we calculate Loan Balance (current potion of debt in 16 months time)

Loan Balance (current potion of debt in 16 months time)

Loan Future Value Formulae = Loan Amount (1 + r)^n

Future Value of Monthly Payments = Payments ((1 + r)^n - 1)/r

Current Porting of debt = Loan Amount (1 + r)^n -  Payments ((1 + r)^n - 1)/r

Current Porting of debt = 1650 000(1 + 0.065/12)^16 - 20219.949846((1 + 0.065/12)^16 - 1/(0.065/12)

Current Porting of debt = 1798958.8403 - 337000.31512

Current Porting of debt = 1461958.5252

The Current Portion of debt in month 16 is $1461958.53 (rounded off to two decimals)

6 0
3 years ago
Read 2 more answers
ABC Company, which is headquartered in the U.S., has its production plant located in a less- developed country. In this producti
SashulF [63]

Answer:

The answer is: a

Explanation:

Ethics refer to moral values which govern a person or in this instance, an organisation. Business ethics encompasses the use of appropriate business policies and practices by companies when handling controversial matters such as corporate social responsibility, bribery, workplace discrimination and so on. These policies and practices are governed by the company's values. ABC company has a dismal code of ethics when it comes to their overseas production. The company is enjoying low cost production at the expense of its employees working under hazardous conditions with very little pay. These employees will potentially suffer long-term illness as a result of their work and they would not be able to afford treatments or requisite medication. These actions by ABC company are morally unjust and therefore not ethical in the lieu of their operations.

4 0
3 years ago
describes demand when a given change in price causes a relatively larger change in the quantity demanded
kakasveta [241]
Answer:




Explain: Demand is elastic when a change in price causes a relatively larger change in quantity demanded. Demand is inelastic when a change in price causes a relatively smaller change in quantity demanded. Demand is unit elastic when a change in price causes a proportional change in quantity demanded.
4 0
2 years ago
Even though most corporate bonds in the united states make coupon payments semiannually, bonds issued elsewhere often have annua
scZoUnD [109]

Answer:

Bond Price​=  816.29

Explanation:

Giving the following information:

YTM= 0.075

Coupon= 0.058*1,000= 58

Years to maturity= 23 years

Face value= 1,000

<u>To calculate the price of the bond, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 58*{[1 - (1.075^-23)] / 0.075} + [1,000/(1.075^23)]

Bond Price​= 626.79 + 189.5

Bond Price​=  816.29

4 0
2 years ago
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