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tatyana61 [14]
3 years ago
8

Let’s say you own a firm that produces and sells Ping-Pong tables. The name of your company is iPong because your tables have a

plug-in jack for all Apple products. To finance a new factory, you decide to sell bonds. Your bonds are rated BBB. How will demand be affected if a ratings agency upgrades your bond rating to AA?
Business
1 answer:
Afina-wow [57]3 years ago
4 0

Answer:

Increase

Explanation:

Bonds refer to medium of raising long term finance whereby the issuer agrees to pay periodic coupon payments and principal repayment upon maturity to the lenders.

Bond ratings convey the credit risk a bond carries. For instance, AAA rating is considered to be the best rating followed by AA, etc. Such ratings depict the credit worthiness of the bond issuer.

Higher or better the credit rating, more popular the bonds would be, lesser would be the investment risk and thus more would be their demand.

In the given case, the bonds which were initially rated BBB have been upgraded to AA. This would result into an increase in the demand for such bonds.

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"Vaughn Corporation is considering the issue of commercial paper and would like to know the yield it should offer on its commerc
Naddik [55]

Answer:

7.6 percent

Explanation:

Vaughn should offer 7.6 percent on its commercial paper.

This is calculated by adding the 0.2 credit risk premium to 0.1 percent liquidity premium + 0.3 percent tax adjustment + 7 percent annualized t bills rate.

= 0.1 + 0.2 + 0.3 + 7

= 7.6

Based on this Vaughn would offer 7.6 percent on its commercial paper.

6 0
3 years ago
There is a 15 percent probability the economy will boom; otherwise, it will be normal. Stock G should return 15 percent in a boo
Bess [88]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Download xlsx
4 0
4 years ago
31)Private property and competition between businesses are common in
Scilla [17]

Answer:

C)capitalist

Explanation:

Market economies and mixed economies can be described as capitalist economies. In capitalist economies, private individuals and firms own the factors of production or capital goods. The private sector produces goods and services consumed in the economy. The motive for producing the goods is the private sector's self-interest or profits.

The free enterprise market is the purest form of a capitalist economy. Capitalist economies contrast with socialists economies where ownership of capital goods is in the government's hands.

7 0
3 years ago
Real per capita GDP in Singapore in 1960 was about $450, but it doubled to about $900.00 by 1977. a. What was the average annual
aleksandrvk [35]

Answer:

4.16%

Explanation:

to calculate Singapore's economic growth rate we can use the future value formula (we could also use the rule of 72 but it is not very exact):

future value = present value x (1 + r) ⁿ

  • future value = 900
  • present value = 450
  • n = 17
  • r = ?

900 = 450 (1 + r)¹⁷

(1 + r)¹⁷ = 900 / 450 = 2

1 + r = ¹⁷√2 = 1.0416

r = 1.0416 - 1 = 0.0416 or 4.16%

6 0
3 years ago
Ricardo construction began operations on december 1. in setting up its accounting procedures, the company decided to debit expen
oksian1 [2.3K]

Answer:

Answer to every question is in the explanation section

Explanation:

a) On December 1 supplies are purchased for 2000$ cash.

b) Insurance premiums of the company were prepared for $1,540 cash on December 2.

c) The company received an advance payment of 13000$ cash on December 15.

d)  For a remodeling work, the company received a payment of 3700$ cash in January.

e) The company has $1,840 of supplies accessible.

f) Insurance policy analysis shows that 340$ insurance coverage has expired.

3) 5570$ advance cash was received for a remodeling project

3 0
3 years ago
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