Answer:
Price paid to the bondholder $1045
Explanation:
given data:
Par value = $1000
percentage of corporate coupon = 4.5%
call premium is for one year coupon payments
call premium = 1 year coupon
call premium = 1000 x 4.5% = 45
Price paid to the bondholder = Par value + call premium
putting all value to get the total price to be paid to bondholder
Price paid to the bondholder = 1000 + 45 = $1045
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Answer:
the price of the stock today is $46
Explanation:
The computation of the price of the stock today is shown below;
= Expected dividend ÷ (required rate of return - growth rate)
= $2.3 ÷ (10.6% - 5.6%)
= $2.3 ÷ 0.05
= $46
hence, the price of the stock today is $46
We simply applied the above formula so that the correct value could come
And, the same is to be considered