Poverty reduction

Forever Yours Insurance Company need to raise $40,000,000. They decide to do so through the issuance of consol bonds. Each bond

photoshop1234 [79]

The company is planning to issue consol bonds. Consol bonds are the bonds that have a perpetual life and, pays a fixed coupon payment.

In the given question, the bond will make annual coupon payment of $900. The current YTM is 7.00%.

Since, these bonds have no fixed life thus, its coupon payments will form a perpetuity. The price of the bond can be calculated using the following formula of perpetuity:

Price of bond = Annual coupon payment / YTM

Price of bond = $900 / 7.00%

Price of bond = $12,857.14286

Thus, the current price of the bond is $12,857.14286

The company wants to raise $40,000,000. The current price of the bond is $12,857.14286 . Calculate the number of bonds to be issued using the following formula:

Number of bonds to be issued = Amount to be raised / Current price of the bond

Number of bonds to be issued = $40,000,000 /12,857.14286

Number of bonds to be issued = 3111.11111 bonds

Thus, the company must issue 3,111 bonds.

3 0

3 years ago

when a company allows a customer to opt in and/or opt out with respect to the data it collects, it is implementing the fair i

Elanso [62]

A corporation is following the choice/consent fair information practice principle when it gives customers the option to opt in or opt out of having their data collected.

<h3>Explain the difference between opt-in and opt-out policies for secondary uses of personal information.</h3>

According to an opt-in policy, anyone who collects personal information must only use the information they have obtained with the owner's express permission and only for the purposes that the owner has authorized. An opt-out policy means that the onus is on the owner of the information to notify the company that collects their personal data which types, and for what purpose, their personal information may be used.

To know more about opt-in and opt-out, visit:

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5 0

2 years ago

Arkensland is a highly industrialized countr. Prices have been steadily increasing over the last few years and inflation reached

ale4655 [162]

Answer: (A) The velocity of money increased this year

Explanation:

First of all, the question says: "which of the following can be most reasonably inferred from THE ABOVE INFORMATION?"

"Above information" here refers to:

"Inflation rate turned out to exceed 4% in the current year, DESPITE Real GDP growth being at the estimated level of 2% AND money supply growth being at the restricted level of 6%"

So why did inflation growth rate still exceed money supply growth rate and real GDP growth rate?

Answer: the velocity of money increased in the current year. Velocity of money is the speed with which money is exchanged in the economy. The fact that the real value of this currency has dropped significantly (due to significant rise in inflation) made individuals lose interest in having a bulk of the currency. Hence, they quickly spend it once it gets to their hands (e.g. as disposable income) and this in turn causes inflation rate to rise.

4 0

3 years ago

Managers should select the capital structure that A. maximizes the value of the firm. B. has no debt. C. is fully levered. D. mi

motikmotik

Answer:

A. maximizes the value of the firm.

Explanation:

Managers should select the capital structure that "A", maximizes the value of the firm. He may select a capital structure with full debt or no debt, based on certain fact and conditions.

Capital Structure may result in Minimum taxes and generate Current level of Income but the most important is to maximize the value of the firm.

4 0

3 years ago

By prohibiting accounting firms from providing both auditing and consulting services to the same corporate clients without permi

murzikaleks [220]

Answer:

A. Conflict of interest

Explanation:

Conflict of interest for an organization or company is a situation whereby the organization has competing interest or loyalties become of their duties to provide more than one service for an individual or organization. This is why the act prohibited accounting firms from doing both consulting services and auditing services for the same clients as there'd be a lot of conflict of interest in doing both.

The company may not be able to make a fair decision if they would be affected by it.

4 0

3 years ago