The Initial value of debt is $111.11 million.
Value of unlevered equity = ($100 million+ $150 million + $191 million)/3 / 1.05
Value of unlevered equity = $147 miliion / 1.05
Value of unlevered equity = $140 million.
Since the corporation have has zero-coupon debt with a $125 million face value, this means If the firm has a value of $100 million, all of it is from the debt value,
Initial value of debt = ($100 million + $125 million + $125 million)/3 / 1.05
Initial value of debt = $111.11 million.
The Initial value of equity = Value of unlevered equity - Initial value of debt
The Initial value of equity = $140 million - $111.11 million
The Initial value of equity = $29 million
Hence, the Initial value of debt is $111.11 million.
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The people that is part of the labor force is option D: an auto mechanic
The best example of frictional unemployment is option D: a company moving to another state, leaving its workforce without jobs
The ways that the economy is affected when the unemployment rate goes up are option B and C:
- Sales tax rates go down.
- Less money is spent on investments.
The most likely result of incomes not rising as quickly as inflation is option B: The unemployment rate rises as more people look for jobs.
The way the standard of living in the United States generally changed over the past 100 years is option B: It has gotten much better.
<h3>What do the terms "labor force" and "work force" mean?</h3>
The labor force is the whole population that is actively seeking employment. It is measured in terms of the number of days and is independent of wage rates. The workforce is the total number of people who are really employed.
Short-term unemployment includes frictional unemployment. When someone actively seeks a job or a new career, they are said to be in a frictional state of unemployment. Unemployment that is only intermittent isn't always a terrible thing. In fact, since it's voluntary, frictional unemployment may be a sign of a strong economy.
Hence, the term "workforce" or "labor force" refers to the group of people who are either employed or unemployed and an auto mechanic is a good example of it.
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I think the answer is A. Homes have the potential to appreciate in value over time.
<span>As you know, credit can be both beneficial and harmful to one's financial well-being. At what point does credit use become problematic? Credit can be good for someones financial well-being when applying for loans for a home, car, or other entities where needing to have good credit to move on in live is benefiting. However, because of having credit, it is easy to get financing or help others get what they need in return for illegal substances or other entities that shouldn't be used for purchase and consumption. </span>
The nominal interest rate will equals 6% if the required real interest rate is 4 percent and expected inflation area is 2 percent,
<h3>What is a Nominal interest rate?</h3>
It means the sum of the real interest rate that will be earned by the lenders and the expected rate of inflation on such loan.
Nominal interest rate = Real interest rate + Expected rate of inflation
Nominal interest rate = 4% + 2%
Nominal interest rate = 6%
Therefore, the Nominal interest rate equals 6%.
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