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swat32
3 years ago
7

Bond Features Maturity (years) 5 Face Value = $1,000Coupon Rate = 5.00%Coupon dates (Annual) Market interest rate today 5.00%Tim

e to call (years) 3 Price if Called $1,050.00Market interest rate in Year 3 is 2.00% The above bond is callable in 3 years. When the bond is issued today, interest rates are 5.00% . In 3 years, the market interest rate is 2.00% . Should the firm call back the bonds in year 3 and if so, how much would the firm save or lose by calling back the bonds? a. yes it should call back the bonds, it will save $8.25b. yes it should call back the bonds, it will save $7.83c. no it should not call back the bonds, it will lose $7.83d. yes it should call back the bonds, it will save $8.49e. no it should not call back the bonds, it will lose $8.25f. no it should not call back the bonds, it will lose $8.49
Business
1 answer:
german3 years ago
5 0

Answer:

it should call back the bonds as it will save $8.25

Explanation:

Bond Price can be calculated using PV function. After 3 years,

N = 2, PMT = 5% x 1000 = 50, FV = 1000, I/Y = 2%

=> Compute PV = $1,058.25

Without the call option, the bond would be worth $1,058.25. But the firm can buy those bonds at $1,050.

Hence, it should call back the bonds as it will save $8.25

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When technological know-how constitutes a firm’s core competence, which entry mode is the optimal choice?
charle [14.2K]

If a high-tech company unit up operations in another country, licensing and joint mission preparations need to be considered.

The finest preference of access mode relies upon the company's method.

When technology constitutes a firm's center competence, utterly-owned subsidiaries are favored, for the reason that they have high-quality control technology.

When control constitutes a company's core competence, foreign franchises controlled by way of joint ventures seem to be superior.

Learn more about the company's method here

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5 0
2 years ago
Holly's is currently an all-equity firm that has 12,000 shares of stock outstanding at a market price of $36 a share. The firm h
vagabundo [1.1K]

Answer:

$31,104

Explanation:

EBIT / 12,000

= [EBIT - ($120,000 × .072)] / [12,000 - ($120,000 / $36)]

EBIT = $31,104

Therefore the minimum level of earnings before interest and taxes that the firm is expecting will be $31,104

8 0
4 years ago
In a monopolistic competitive industry, a. there are significant barriers to exit. b. there are few sellers. c. there are signif
Nesterboy [21]

Each firm in the monopolistic competitive industry produces a slightly differentiated product.

The monopolistic competition occurs where competitive firms produces or manufactures products or services that are similar and close substitutes to one another.

The characteristics of the monopolistically competitive market includes:

  • presence of many sellers in the market
  • easy entrance and exit of consumers in the market
  • differentiated products in the market.

Therefore, the Option D is correct because each firm in the monopolistic competitive industry produces a slightly differentiated product.

Read more about monopolistic competition:

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6 0
3 years ago
A hypermarket is Multiple Choice a shopping mall anchored by four or more department stores such as Sears or Nordstrom. a form o
lina2011 [118]

Answer:

a form of scrambled merchandising, consisting of large stores offering everything in a single one-stop outlet.

Explanation:

hypermarket can be regarded as

retail store which consists of

department store as well as a grocery supermarket. It is usually large establishment, and gives wide variety of products like groceries, appliances and clothing. Hypermarkets is a best place where shoppers get one-stop shopping experience. It should be noted A hypermarket is a form of scrambled merchandising, consisting of large stores offering everything in a single one-stop outlet.

8 0
3 years ago
Noah files a suit in a state court against Olivia. The case proceeds to trial, after which the court renders a verdict. If eithe
Luba_88 [7]

Answer:

copy of the record of appeal

Explanation:

record of appeal refers to the reproduction of all the proceedings of the Court(s) from which a case has passed through and it is important, indispensable bundle of documents that an appellate Court relies on and is bound by in hearing an appeal. Record of appeal can simply put as the documents to be printed by the appellate court's clerk's office and copies of the record are provided to each judge who will decide the appeal case.

5 0
3 years ago
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