Eurodollar bonds:

Vital Silence Corp. has just issued a 30-year callable, convertible bond with a coupon rate of 6.4 percent and annual coupon pay

Aleks04 [339]

Answer:

a. $880.74

b. 13 years

Explanation:

a. Conversion ratio = Current Value of bond / Conversion price = 1,000 / 93.4 = 10.71

Conversion price of bond = 10.71 × 28.60 = $306.31

Coupon = Par value of bond * Coupon rate = $1,000 * 6.4% = $64

Present value of straight debt is calculated below:

Present Value = $64 × [1-(1+7.4%)^-30 / 7.4%] + [$1,000 / (1+7.4%)^30]

= $64*11.93 + $117.46

= $763.28 + $117.46

= $880.74 .

Therefore, the minimum value of bond is $880.74

b. Conversion ratio = 10.71

Current stock price = $28.6

Suppose number of year the stock will take to reach above $1,140 is t.

Conversion value = Current stock price * Conversion ratio*(1+10.8%)^t

$1,140 = $28.6 * 10.71 * (1.108)^t

(1.108)^t = 3.7218

t = 12.8145 year.

t = 13 years

8 0

3 years ago

Regional trade agreements In the following table, indicate whether each statement about regional trade agreements is true or fal

trasher [3.6K]

Answer:

A. True

B. True

C. True

D. True

E. False

F. True

Explanation:

It is true that under regional trade agreements, several countries eliminate tariffs among themselves and lower tariffs against all other countries.

It is true that regional trade agreements are consistent with GATT's most favored nation principle. GATT is an acronym for General agreement on tarrifs and trade and most favoured nation (MFN) is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment (trade advantages include low tariffs or high import quotas).

It is true that the countries in the European Union (EU) keep their own tariffs with the countries outside the EU. The EU trade agreement is basically to promote trade among EU countries, not necessarily to lower tariffs for non members.

US and China have a trade agreement which lowers tarrifs and US and Canada operate a Free Trade agreement (FTA) which seeks to eliminate all tarrifs on trade between the two countries. Therefore If China wants to sell a good to Canada, it can first export it to the United States, where the tariff is lower, and then ship it duty- free to Canada.

It is false that countries who enter into a free trade area agreement maintain a common schedule of tariffs with countries outside the agreement. The agreement does not cover trade among non members.

In customs union, rules of origin are not needed. Custom unions only considers where the good is shipped from and not the originating nation.

8 0

3 years ago

Responding to pressure for _____ requires that a firm differentiate its product offering and marketing strategy from country to

taurus [48]

Answer:

The correct answer to the following question is option E) being locally responsive.

Explanation:

Local responsiveness can be defined as the degree to which a company must make customization in its products and method , which are necessary in order to meet the conditions in other countries. A company need to make customization in order to meet the diverse demands of the people , which arises because of the different taste and preferences, competitiveness in the market, difference in distribution model, government policies etc.

3 0

3 years ago

Which category of GDP does each of the following items count in? Enter one of the following letters to correspond to consumption

elena-14-01-66 [18.8K]

Explanation:

-Nissan produces a car at its Tennessee plant in December, but does not intend to sell it until after the end of the year __DNC__ .

This transaction does not count because GDP is measured in one year. Nissan sell will be accounted in the next year GDP.

-An auto parts maker buys an idle textile plant in North Carolina with the intent of converting it to a distribution center_I__.

This is private investment of the auto parts maker.

-The U.S. Army rents a warehouse to store surplus equipment __G__.

This is a expense of the U.S government.

-A state employees' pension fund in California buys $10 million in corporate bonds__G__.

This is a expense of the U.S government.

-A local bakery buys 500 pounds of flour to make bread __I__.

This is private investment of the bakery.

-A doctor buys a painting to hang in his office waiting area from an artist on Etsy __I__

This is private investment because if his office looks better maybe this will attract more clients.

-A family rents a beach house for a week's vacation __C__.

This is household’s consumption.

-A retiree in Chicago receives a Social Security check from the U.S. Treasury__G___

This is an expense of the U.S government.

-A factory in the U.S. produces chemicals and sells them to a firm in Canada __NX___ .

This fits in the net exports account as an export.

7 0

3 years ago

Mario owns a store that sells skateboard equipment. Mario understands that people are most likely to notice his headline text in

Shalnov [3]

What Mario should do from including this in his headline is being considerate on how he is doing from knowing how the people are going to be apparently right to give note in his own headline he created by using a text ad.

6 0

3 years ago