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2 years ago

Which of the following help convince managers to work in the best interest of the stockholders?

Business

1 answer:

Ad libitum [116K]2 years ago

4 0

Answer:

E. I, II, III, and IV

Explanation:

Managers are hired and trusted with the responsibility of serving and making decision for the best interest of stockholders. This involves investing in projects that only add value to shareholders. One incentive to make them maintain this is through allowing managers to own company stocks, have stock options plans; that way they would know any risky decisions will directly affect their share value. Additionally, managers faced with threats of proxy fight and conversion of the company to partnership will have low incentives to pursue their own self interests because the new company policies may not be as favorable.

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Suppose a -year, bond with annual coupons has a price of and a yield to maturity of . What is the bond's coupon rate? The cou

kari74 [83]

Complete Question:

Suppose a five-year, $1000 bond with annual coupons has a price of $903.35 and a yield to maturity of 5.6%. What is the bond's coupon rate?

Answer:

3.396% Approximately

Explanation:

We can calculate the coupon interest by using the formula given in the attachment.

Now, here we have:

F is the Face value which is $1000

P is the price of the bond which in this case is $903.35

C is the Coupon interest

n are the number of years which is 5 years in this case

Yield to Maturity is 5.6%

By putting the values in the given equation we have:

5.6% = [C + ($1000 - $903.35)/5 years] / [($1000 + $903.35)/2]

5.6% = [C + 19.33] / [951.675]

0.056 * 951.675 = C + 19.33

53.2938 = C + 19.33

C = 53.2938 - 19.33

C = $33.96 approximate estimate.

Now we will find the coupon rate by using the following formula:

Coupon Rate = Coupon Interest / Face Value

By putting values, we have:

Coupon Rate = $33.96 / $1000 = 3.396% Approximately.

Accurate Coupon interest can be calculated using excel. The above answer gives minor difference in decimal points.

6 0

3 years ago

Airborne Airlines Inc. has a $1,000 par value bond outstanding with 10 years to maturity. The bond carries an annual interest pa

yanalaym [24]

Answer:Yield to maturity is 9.59%; After tax cost of debt =7.672%

Explanation:

A) Yield to maturity ={ C + (FV-PV)/t} / {(FV +PV)/2}

Where C – Interest payment = $90

FV – Face value of the security

= $1000

PV – Present value/curent market value = $960

t – years it takes the security to reach maturity= 10 years

imputing the values and calculating,

yield to maturity ={ C + (FV-PV)/t} / {(FV +PV)/2}

= $90 + (1000-960)/10} / 1000 + 960 /2

$90 + 4= $94 /980= 0.0959

therefore Yield to maturity is 9.59%

B) After tax cost of debt = Yield To Maturity x (1 - tax rate)

=9.59% x (1-20%)= 9.59% x (1-0.2 )= 9.59% x 0.8 =

9.59 % x 80%=7.672%

4 0

3 years ago

Outlines give you a chance to organize your thinking before determining word choice and sentence structure. Which of the followi

Leona [35]

Answer:

<u>When making an outline, it is a good practice to:</u>

Put the main idea in the title
Have one main topic that does not relate to the title
Strive for 3-5 major components
Move single sub point to larger groups
Allow sub points to overlap.
Combine sub points whenever possible

6 0

3 years ago

What is the major advantage of processing information automatically?

Lady bird [3.3K]

The answer is we can use our cognitive resources for other more important matters. In addition to social cognition, it brings up to the way people select, understand, remember, and use social data to make conclusions and decisions about themselves and others and Schemas are the cognitive constructions we use to establish our information of the social world.

7 0

3 years ago

The term applied to the periodic expiration of a plant asset's cost is

Burka [1]

<span>The term applied to the periodic expiration of a plant asset's cost over its life in a balanced and orderly way is depreciation. It is not process for valuation nor is process that results in gathering of cash. Land expenses are not subject to depreciation.</span>

4 0

3 years ago