Answer:
$2,189.76
Explanation:
<em>The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.</em>
<em>The price of the bond can be calculated as follows:</em>
<em>Step 1</em>
<em>PV of interest payment</em>
Interest payment =( 5.94%× $2000)/2
= $59.4
Semi annual yield = 5.1/2 = 2.6%
PV of interest payment
= 59.4× (1-(1.026)^(-20×2))/0.026)
= 59.4 × 24.41400537
=<em>$ 1,450.19</em>
Step 2
<em>PV of redemption value</em>
= 2,000 × (1+0.051)^(-20)
= 2,000 × 0.369781925
= 739.56
Step 3
<em>Price of bond </em>
= $1,450.19 + $739.56
=$2,189.76
Answer:
Total cost= $930
Explanation:
Giving the following information:
Copy Center pays an average wage of $12 per hour.
Overhead rate= $18 per direct labor hour
Job M-47:
used $330 of direct materials and took 20 direct labor hours of labor to complete.
Total cost= direct material + direct labor + allocated overhead
Total cost= 330 + 20*12 + 20*$18= $930
The above is referred as Comparative statements. A comparative statement is an archive that contrasts a specific budgetary proclamation and earlier period articulations or with the same monetary report produced by another organization. Examiner and business supervisors utilize the wage explanation, monetary record and income proclamation for relative purposes.
Answer:
Solution: the answer in delivered in 2 stages because of the character of dualistic problems:-
Part (1)
As Kent and Craig are concerned during a professional with prospective risk and that they wish to hide their prospective accountability. the character of the industry which can be utmost applicable in corporate against the other variety of industry like individual merchant or partnership company because of the subsequent details:-
Reason I: Unrestricted accountability- just in case of insolvency or industry letdown, Kent and Craig don't seem to be obligated to trade their particular resources.
Reason II: convenience of Business- because of the Supply of additional investment compared to restricted investment in sole profession and partnership company, they're ready to manage with the qualms related to the industry.
Part (2)
Wanting to the purposes of Dave and Cindy, the indebtedness corporation is desirable because of the subsequent details:-
Reason I: No danger to non-public assets because the corporation is proscribed accountability.
Reason II: just one level of tax within the variety of company tax
.
Answer and Explanation:
The computation is shown below:
a. Marpor's value without leverage is
But before that first we have to calculate the required rate of return which is
The Required rate of return = Risk Free rate of return + Beta × market risk premium
= 5% + 1.1 × (15% - 5%)
= 16%
Now without leverage is
= Free cash flows generates ÷ required rate of return
= $16,000,000 ÷ 16%
= $100,000,000
b. And, with the new leverage is
= (Free cash flows with debt ÷ required rate of return) + (Tax rate × increase of debt)
= ($15,000,000 ÷ 0.16) + (0.35 × $40,000,000)
= $93,750,000 + $14,000,000
= $107,750,000
