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Butoxors [25]
3 years ago
11

1. Which of the following events would make it more likely that a company would call its outstanding callable bonds? a. The comp

any's bonds are downgraded. b. Market interest rates rise sharply. c. Market interest rates decline sharply. d. The company's financial situation deteriorates significantly. e. Inflation increases significantly.
Business
1 answer:
muminat3 years ago
6 0

Answer:

The answer is letter C

Explanation:

Market interest rates decline sharply.

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The principle of diversification teaches us that using two securities it is always possible to find a portfolio with no short po
Oliga [24]

Answer:

C. Less than the variance of each asset, except when the two assets are perfectly positively correlated.

Explanation:

In diversification, there is the less risk in the portfolio that can be determined by the standard deviation. Also the risk can decrease at the time when the asset is lower than the perfect correlation and the same should be place in portfolio. Now if the asset along perfect positive correlation place in the portfolio so the the portfolio risk could be large than the risk of the individuals assets

6 0
2 years ago
Common stock valuelong dash—Variable growth Personal Finance Problem
xenn [34]

Answer:

$24.18

Explanation:

Dividend for year 0 = $2.2

Dividend at year end 1 = $2.2

Dividend at year end 2 = $2.2(1 + .05) = 2.31

Dividend at year end 3 = $2.31 (1 + .05) = 2.4255

Dividend at year end 4 = $2.4255 (1 + .17)= 2.8378

Dividend at year end 5 = $2.8375 (1 + .09)= 3.0932

Dividend at year end 6 = $3.0932 (1 + .09) = 3.371

MPS = \frac{D_{1} }{(1\ +\ k)^{1} }  + \frac{D_{2} }{(1\ +\ k)^{2} } \ +\ \frac{D_{3} }{(1\ +\ k)^{3} } \ +\ \frac{D_{4} }{(1\ +\ k)^{4} }  +\ \frac{D_{5} }{(1\ +\ k)^{5} } \ + \frac{1}{(1\ +\ k)^{5} }  [\frac{D_{6} }{(k\ -\ g)\ ]}

where MPS = Market price of share

          D= Dividend for different years

          k = Cost of equity

          g= constant growth rate after year 5

putting values in above equation we get,

MPS = 1.864 + 1.65 + 1.478 + 1.463 + 1.352 + 0.4371 × 37.462

MPS = $24.18

The maximum price per share that an investor who requires a return of 18% should pay for Home Place Hotels common stock is <u>$24.18</u>

4 0
3 years ago
Annual maintenance costs for a particular section of highway pavement are $2500. The placement of a new surface would reduce the
rewona [7]

Answer:

The maximum investment is $6,360.111

Explanation:

Giving the following information:

The placement of a new surface would reduce the annual maintenance cost to $500 per year for the first 3 years and to $1000 per year for the next 7 years. After 10 years the annual maintenance would again be $2500.

We need to find the net present value. The maximum initial investment will be the amount that makes the NPV cero.

NPV=∑[Cf/(1+i)^n]

Cf= cash flow

<u>For example:</u>

Year 1= 500/1.05= 476.19

Year 3= 500/1.05^3= 431.92

Year 5= 1,000/1.05^5= 783.53

NPV= 6,360.111

The maximum investment is $6,360.111

6 0
3 years ago
A supply curve​ _______.
photoshop1234 [79]
Supply curve shows when quantity increases the price also increases and vice versa
4 0
3 years ago
Product V72 sells for $20 per unit as is, but if enhanced it can be sold for $25 per unit. The enhancement process will cost $52
Furkat [3]

Answer:

It will incur an Opportunity cost of $8,000.

Explanation:

It will incur the opportunity cost of $8000 because the additional unit produces by the company then the additional revenue that is generated will be equal to the amount (25 - 20) x 12,000 = 60,000. Since the additional cost, that incurs for the production of 12000 units is 52000. Therefore the profit earned is $8000.

So if the company does not produce it then it will lose the profit of $8000.

3 0
2 years ago
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