Answer:
b. 1,062.81
Explanation:
the key to answer this question is to remember that valuation of a bond depends basically of calculating the present value of a series of cash flows, so let´s think about a bond as if you were a lender so you will get interest by the money you lend (coupon) and at the end of n years you will get back the money you lend at the beginnin (principal), so applying math we have the bond value given by:
where: principal as said before is the value lended, coupon is the rate of interest paid, i is the interest rate and n is the number of periods
so applying to this particular exercise, as it is not said we will assume that 6% and 7% are interest rate convertible seminually, so the price of the bond will be:
price=1,062.81
take into account that here we are asked about semianually payments, so in 8 years there are 16 semesters.
Reflects the satisfaction a consumer receives from consuming a particular set of goods and services
A capitalist system will depend on fair completion among
business with the following; driving lower quality, higher quality or other
choices in which will affect the system. With this, it is namely referred to as
the right to fair competition which is being done by people competing in
business.
Answer:
22.14 billion
Explanation:
First, we will calculate the WACC where,
- WACC = we x ke + wd x kd x (1 - tax)
-
And Weight of Equity = E/(D+E) = 1 / 1.85 = 54%
- The weight of debt = 1 - 54% = 46%
-
The cost of equity = 12.8%
- the cost of debt = 5.6%
- WACC = 54% * 12.8% + 46% x 5.6% = 9.49%
The WACC for the project will be 9.49 + 2 = 11.49% as the project is riskier.
As the after tax cash savings are expected to grow at a constant rate indefinitely, it is a perpetuity,
V of perpetuity = 1.88m / (11.49% - 3%) =$22.14
This (22.14) is the maximum that the company can invest as initial cost as at this initial investment, the present value of the project will be zero.
Answer:
A. Exporting
Explanation:
The exporting is the process in which the firm or the company sell its products to the foreign inventory with a hope to increase the sales and covers the foreign with a set time which results into increase in high sales and high profits.
Here, the seller is known as exporter while the foreign buyer is known as importer
So in the given case, when a firm chooses to build new plants and facilities from scratch in foreign markets so this we called exporting
