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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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On January 1, Greene Inc. issued $5,000,000, 9% bonds for $4,685,000. The market rate of interest for these bonds is 10%. Intere
skad [1K]

Answer:

b.$296,500.

Explanation:

Calculation to determine what Greene should report as unamortized bond discount

First step is to calculate the discount amount

Discount Amount= ($5,000,000 × .09) - ($4,685,000 × .10)

Discount Amount= $18,500

Now let determine the unamortized bond discount

Unamortized bond discount=$315,000 - $18,500 Unamortized bond discount= $296,500

Therefore Greene should report unamortized bond discount of $296,500

5 0
3 years ago
Coursework beyond that of a bachelor's degree is known as interdisciplinary.<br><br> True<br> False
Marysya12 [62]

Answer:

false

Explanation:

6 0
3 years ago
50 POINTS
Dmitry_Shevchenko [17]
Nothing will change. Upper management must enthusiastically pursue the plan and create a culture for employees to follow
4 0
3 years ago
Define Moore’s Law and explain why its consequences are important to business professionals today. State how business profession
balandron [24]

Answer:

Explanation:

1)Moore's Law was created by Gordon Moore, the co-founder of Intel Corporation. Moore's Law states that the speed of a computer doubles every 18 months. Because of Moore's Law, the ratio of price to computer performance has fallen and the cost of storage, data processing, and communication have dropped to nearly zero and any routine skill can be outsourced to the lowest bidder.

2)The text defined job security as a "marketable skill and the courage to use it". To attain job security, business professionals should develop their non-routine cognitive skills such as collaboration, the ability to experiment, systems thinking, and abstract reasoning. This course in introductory MIS requires students to learn these four keys skills because every topic will require us to apply and practice these skills.

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2. Course leads the path to job security by educating students in marketable skills

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7 0
4 years ago
The Alpha Beta Corporation disposes a capital asset with an original cost of​ $170,000 and accumulated depreciation of​ $109,000
Bingel [31]

Answer:

Option D) $54.400

Explanation:

When  a company disposes a capital asset, the cost of the asset it's the remanent value, that is the difference between the original cost less the accumulated depreciation, in this case $170.000 minus $109.000, remanent value is $61.000.

This value it's the cost of sale and the price it's $50.000 , the result of this transaction it's a loss of ($11.000) so the after-tax cash inflow it's ($4.400).

The total Cash Inflow it's the sum of $50.000 (gained from the sale) and the save on taxes for $4.400, because of the loss I get a payback on taxes, the total is $54.400.

8 0
4 years ago
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