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sergiy2304 [10]
3 years ago
7

g. How does the equation for valuing a bond change if semiannual payments are made? Find the value of a 10-year, semiannual paym

ent, 10% coupon bond if the nominal rd 13%. Ehrhardt, Michael C.. Corporate Finance: A Focused Approach (p. 236). Cengage Learning. Kindle Edition.
Business
1 answer:
Zepler [3.9K]3 years ago
6 0

Answer:

$834.73

Explanation:

the market value of the bonds is calculated by adding the present value of its maturity value (face value) + the present value of its coupon payments. The discount rate will be the market rate instead of the coupon rate:

PV of face value = $1,000 / (1 + 6.5%)²⁰ = $283.80

PV of coupon payments = $50 x 11.01851 (PV annuity factor, 6.5%, 20 periods) = $550.93

the bond's market value = $283.80 + $550.93 = $834.73

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Harry owns long-term investments in a public company. These investments pay him every year, by law, and expire ten years after t
Amanda [17]

Answer:

Convertible Bonds

Explanation:

Convertible Bonds are debt securities which yield annual coupon rate of return, are redeemable after a period and during their life provide an option to the holder of such securities to get these converted into common stock based upon the conversion ratio.

Conversion ratio refers to the number of common stock that would be issued in return for a bond.

In the given case, Harry holds a security which provides him fixed return by law i.e obligatory for the borrower to pay him interest every year, expire after 10 years i.e period to maturity in addition to allowing him a conversion ratio of 50 i.e 50 common stocks for every bond held.

Thus, Harry owns a 10 year convertible bond.

5 0
3 years ago
Do you think the minimum wage should be increased, remain at its 2009 level, or be eliminated? Give two reasons in favor of, and
Simora [160]
There are a lot of factors to consider in increasing minimum wage.

In the pro side, minimum wage workers will be happy if their wage is increased because their take home pay will be higher.

However, if this increase will be implemented, a lot of business owners, especially small businesses, will be forced to relieve some workers of their position as well as be discouraged to hire more workers. This is because the salary for new hires will be used for the increase. Increasing minimum wage will also result to the increase of the wages of the existing workers, to ensure that they are equally treated. 
4 0
3 years ago
Consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and d
lara [203]

Answer:

True

Explanation:

Consumer behavior is the study of the factors that influence customer's actions in the market place. Consumer's behavior seeks to understand why customers select, purchase, dispose, or consume a particular good or service to satisfy their needs and wants.  It analyses the consumer processes in decision making.

Consumer behavior applies concepts from other disciplines such as psychology, economics, biology, and chemistry.  Marketers use consumer behavior to understand the buying patterns of customers. The information helps businesses to identify gaps in the market and develops products to fill those gaps.

8 0
3 years ago
An increase in interest ratesA. increases investment spending on​ machinery, equipment,​ factories, consumption spending on dura
RoseWind [281]

Answer:

The correct answer is option C.

Explanation:

An increase in the interest makes it more expensive to borrow money. In other words, the cost of borrowing increases. This will cause investment expenditure on machinery, equipment, and​ factories to decline.  

Increased interest rate also increases the opportunity cost of holding money. The consumers will get more return from saving. This will reduce, the consumer spending on durable goods.  

The increased interest rate will attract foreign capital inflows. The increase in demand for currency will increase its value. This will reduce exports and increase imports. As a result, net exports will decline.

8 0
3 years ago
A u.s. manufacturer that exports goods made at its u.s. plants for shipment to foreign markets:
iris [78.8K]
A U.S. producer that exports merchandise made at its U.S. plants for shipment to outside markets becomes more focused in remote markets or in foreign markets when the U.S. dollar decreases in values against the currencies or money of the other nations or countries to which it is trading.
7 0
3 years ago
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