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zmey [24]
3 years ago
12

Your firm has a credit rating of A. You notice that the credit spread for​ five-year maturity A debt is 85 basis points (0.85 %

). Your​ firm's five-year debt has an annual coupon rate of 6.5 %. You see that new​ five-year Treasury notes are being issued at par with an annual coupon rate of 1.9 %. What should be the price of your outstanding​ five-year bonds?

Business
1 answer:
Hunter-Best [27]3 years ago
7 0

Answer:

$1,172.97

Explanation:

We use the Present value formula i.e to be shown in the attached spreadsheet. Kindly find it below:

Given that,  

Assuming figure Future value = $1,000

Rate of interest = 1.9% + 0.85% = 2.75%

NPER = 5 years

PMT = $1,000 × 6.5% = $65

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the price of the bond is $1,172.97

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Two months ago, Air-tite Corporation purchased 4,500 pounds of Hydrol, paying $15,300. The demand for this product has been very
Anna007 [38]

Answer: The $4.05 market price

Explanation: Air-tite can buy or sell Hydrol at $4.05. If they decide to accept the order, there has to be a higher return on the use of Hydrol in the return than they would get from selling Hydrol as is.

There may also be an opportunity cost to using the product for this special order if there is an order that would yield higher returns for the use of Hydrol.

The quantity that would remain after making the special order does not have any impact on the decision making process, as they are considering just one order that requires Hydrol.

The purchase price is not relevant as they cannot purchase Hydrol at that price in the present. The total quantity is not relevant either as they have enough for the order.

3 0
3 years ago
The three traits an entrepreneur must possess to be successful are _____.
Yanka [14]
Hello,

Here is your answer:

The proper answer to this question is option A "<span>motivation, humility, and decision making". You honestly need motivation, humility, and decision making skills in order to be successful.

Your answer is A.

If you need anymore help feel free to ask me!

Hope this helps!</span>
7 0
3 years ago
Read 2 more answers
I need to know the answer to this question please
Tanya [424]

Answer:

Point B

Explanation:

A "trough" in essence is just like a dip or a ditch. The answer is B because it is at the lowest point of that dip.

8 0
3 years ago
Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that
almond37 [142]

Answer:

$20

Explanation:

Calculation for the marginal cost of producing an additional unit of output

Using this formula

Marginal cost=Wage per week/Marginal product of labor

Let plug in the formula

Marginal cost= $700 per week/35 units per week

Marginal cost= $20

Therefore the marginal cost of producing an additional unit of output is $20

3 0
2 years ago
You will have $ in 20 years if you set aside $2,000 at 8%. (Use the future value tables from Chapter 5.)
Romashka-Z-Leto [24]

In 20 years you'll have $5,220.

2,000×0.08=160

2,000+(160×20)= 5,220.

4 0
3 years ago
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