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topjm [15]
3 years ago
5

Hydro Systems has 15-year bonds outstanding with a coupon rate of 6 percent. Interest is paid annually. The face amount of each

bond is $1,000. What is the company's pre-tax cost of debt if the bonds currently sell for $1,080?
A) 5.22 percent
B) 5.55 percent
C) 4.71 percent
D) 5.36 percent
E) 4.42 percent
Business
1 answer:
Leya [2.2K]3 years ago
7 0

Answer:

A) 5.22 percent

Explanation:

The Pretax cost of debt is the Yield to maturity (YTM) of bond.

Using a financial calculator , you can solve for the YTM with the following inputs;

Face value ; FV = 1000

Maturity of bond; N = 15

Annual coupon payment; PMT = coupon rate * Face value =  6%*1000 = 60

Current price; PV = $1,080

then compute annual interest rate; CPT I/Y = 5.22%

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According to the erosion model of organizational commitment, the employee with the fewest emotional bonds is the most likely to
Likurg_2 [28]

The statement, according to the erosion model of an organizational commitment, the employee with the fewest emotional bonds is the most likely to quit, is true.

The erosion model explains that an organization's employee who have less or fewer emotional bonds tend to quit the organization because they do not feel or get involved in the organization, or they don't feel any attachment to it.

Here the social influence model states that suppose when two employees are closely related or have good terms, so if one of them quits their work, then the other one is more likely to follow them and leave the organization.

Hence, the erosion model suggests that employees with fewer bonds will be most likely to quit the organization.

To learn more about erosion model here:

brainly.com/question/28444776

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4 0
1 year ago
Equipment was purchased for $68,000 on January 1, 2013. Freight charges amounted to $2,800 and there was a cost of $8,000 for bu
Dahasolnce [82]

Answer:

a. $26,720

Explanation:

Before computing the accumulated depreciation, first we have to compute the original cost of the equipment, after that the depreciation expense. The calculation is shown below:

Original cos t = Equipment purchase cost + freight charges + installment charges

= $68,000 + $2,800 + $8,000

= $78,800

Now the depreciation expense under the straight-line method is shown below:

= (Original cost - residual value) ÷ estimated life in years

= ($78,800 - $12,000) ÷ 5 years

= $13,360

Now the accumulated depreciation is

= Depreciation expense × number of years

= $13,360 × 2 years

= $26,720

5 0
3 years ago
Durable ceramics, inc., provides inexpensive ceramic tile to builders of institutional buildings such as schools, prisons, and p
anzhelika [568]

Answer:

d. cost-less will go out of business, and durable will gain higher power over its customers.

Explanation:

Durable ceramics, inc will only reduce its prices if this is to its advantage. We live in a capitalist world where companies make decisions based on their own benefits. In this case, in order for Durable ceramics, inc to lower its prices and have no losses, it would expand its sales. In this way, Durable ceramics, inc would be able to capture customers from its competitors, and could make them go bankrupt.

Thus, we can conclude that if Durable ceramics, inc reduced its prices, Cost-Less would go out of business and Durable would gain greater power over its customers.

5 0
3 years ago
The increase in unemployment that occurs during recessions and depressions is called Group of answer choices normal unemployment
belka [17]

Answer:

cyclical unemployment.

Explanation:

Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;

I. Cyclical unemployment rate (CU).

II. Frictional unemployment rate (FU).

III. Structural unemployment rate (SU).

IV. Actual unemployment rate (AU).

V. Natural Rate of Unemployment (NU).

A cyclical unemployment can be defined as a type of unemployment which is typically related to changes in the business, economy or industry cycle such as recession, governmental policies etc.

Mathematically, cyclical unemployment rate can be calculated using the formula;

Cyclical \; unemployment \; rate \;  (CU) = Actual \; unemployment \; rate \; (AU) - Natural \;unemployment \; rate \; (NU)

Hence, the increase in unemployment that occurs during recessions and depressions is called cyclical unemployment

7 0
3 years ago
Suppose the economies of China and India have begun to slow down very rapidly. Based on this scenario
bazaltina [42]

Answer:

The correct answer is C

Explanation:

Economies means the state of the region or the country in relation to the consumption and the production of the services and the goods and also the supply of the money.

If the economies of the India and the China, will be slow down, then the loanable funds as well as the interest rates will increase because the money for liquidity will be negligible which lead to competition among using the money for personal consumption or to delay the consumption through lending the money out.

6 0
3 years ago
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