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arlik [135]
3 years ago
12

On January 1, Year 1. a company issues $100.000 of 8% bonds maturing in 10 years when the market rate of interest is 9%. The bon

ds were issued at a discount. Market interest rates drop to 6% by December 31, Year 2. The company retires these bonds on December 31, Year 2. Which of the following is true?
a) The bonds can be retired at their carrying value
b) The company will incur a loss
c) The company will incur again
d) No gain or loss will be recorded
Business
1 answer:
Margarita [4]3 years ago
5 0

Answer:

b) The company will incur a loss

Explanation:

The market rate at the time of issue = 9%, while coupon rate = 8%, it says bonds provide lesser return when compared to the market rate.  

At end of year 2 market rate drops to 6% which is lower than the Bond's coupon rate. Which means the bond's providing high return when compared to the market. So, company to retire the bonds need to pay more than the par value.

As company should retire these bonds more than par value, the company incur a loss.

Option 'B is correct

The company incur a loss

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This is the false statement.

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The fair value of stock can be calculated using the dividend growth model. While calculating the value of the stock, the growth of the dividends should be considered either in a stable rate or at a different rate during the period at hand.

The dividend growth model is also known as a <u>valuation model</u> as it is used to achieve the value of the stock.

Equity cost is the cost that the firm owes to the equity investors to compensate the risk of their investment.

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Your boss has asked you to email a client to let her know that the company will be late in delivering a report she’s requested.
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Generally, it is important to be upfront, express regret that the company can't meet the deadline, and tell the customer how the problem will be fixed.

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The major activities of the Planning Section include:
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The answer to the question stated above is letter A.

.The major activities of the Planning Section include: Preparing and documenting Incident Action Plans.
ADDITIONAL INFORMATION ABOUT PLANNING SECTION
>Planning section includes the following major activities:
<span>         -Collect, evaluate, and display incident intelligence and information.
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4 0
3 years ago
Read 2 more answers
Suppose the supply and demand for a certain textbook are given by ​supply: p equals one fourth q squared comma ​demand: p equals
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Answer:

the demand quantity and the supply quantity at a price of ​$15 is 8 units

Explanation:

Supply, P = 1/4 Q²

Demand, P = - 1/4 Q²+30

If P = 15

Quantity Demanded will be 15 = -0.25Q²+30;

if we move 30 across the equality sign.

Therefore -0.25Q²=-15; divide both sides by -0.25;

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Quantity Supplied will be 15 =  1/4 Q², dividing both sides by 1/4

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6 0
3 years ago
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Tamarisk Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Carla Vista Company. The t
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Answer:

a. $46,000

see the other answers in the explanation

Explanation:

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b.

(c)

1/1/17

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1/1/17

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1/1/18

Cash 46,000

Lease Receivable 46,000

12/31/18

Lease Receivable 13,514

Interest Revenue 13,514

8 0
3 years ago
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