Opportunity cost can also be defined as the _________

Red Mountain, Inc. bonds have a face value of $1,000. The bonds carry a 7 percent coupon, pay interest semiannual, and mature in

olganol [36]

Answer:

R = 7% x $1,000 = $70

Po= R/2(1-(1+Kd/m)-nm/Kd/m + FV/(1+Kd/m)nm

Po = 70/2(1-(1+0.0682/2)-13.5x2/0.0682/2 + 1,000/(1+0.0682/2)13.5x2

Po = 35(1-(1+0.0341)-27/0.0341 + 1000/(1+0.0341)27

Po = 35(17.4663) + 1,000/2.4728

Po = $611.3205 + $404.40

Po = $1,015.72

The correct answer is C

Explanation:

The current price of a bond is equal to present value of coupon plus the present value of face value of the bond. The bond pays semi-annual interest, thus, we will divide the coupon by 2 and then determine the present value. The bond yield will also be divided by 2.

Po = Current price of the bond, R = Coupon, Kd = Bond yield, FV = Face value, n = Bond maturity and m = No of times coupon is paid in a year

4 0

3 years ago

Assume that IBM is expected to pay a total cash dividend of $5.60 next year and that dividends are expected to grow at a rate of

IceJOKER [234]

Answer: $112

Explanation:

The following information can be gotten from the question:

Growth Rate = 5%

Dividend at end of year,D1 = 5.60

Required return, ke = 10%

Then, the current market value will be:

P0 = De/(ke-g)

= 5.60/(10% - 5%)

= 5.60 / 5%

= 5.60/0.05

= $112

Therefore, the current market value of a share of IBM stock is $112.

6 0

3 years ago

Weight Watchers is a weight-management company with operations in about 30 countries. Consumers buy almost $5 billion of Weight

VARVARA [1.3K]

Answer:

b. competitive advantage.

Explanation:

Competitive advantage -

It is the condition which allows the company or the country to produce services or goods of lower price but of equal level .

It enables the productivity to generate superior margins or more sales in comparison to its own market rivals .

These are attributed to factors like the cost , branding , the distribution network , customer service , intellectual property and structure .

Hence , from the data of the question , the correct option is ( b ) .

8 0

3 years ago

Serena, a bank manager at the United Front Bank, heads the business loan department. She wants to communicate to all of the bank

Dmitrij [34]

Answer:

(a) She should use specific and simple language.

Explanation:

The communication is the two-way process through which the sender and the receiver can communicate/ talk with each other. It is an exchange of ideas and information. It can be done in verbal or non verbally form.

There are various modes of communication like - telephonic, emails, messaging, face to face, etc.

In the given situation, the Serena should use the specific and the simple language while communicating this bad news so that everyone can listen properly, and the chances of argument and the aggressiveness of the people would be less occur.

3 0

3 years ago

A company acquired an office building, land, and equipment in a single basket purchase. The fair values were $1,200,000, $600,00

oksian1 [2.3K]

Answer:

The total purchase cost for all three assets is $1,800,000.

Explanation:

Ratios based on fair values were:

6: 3: 1 for Office Building $1,200,00 : Land $600,000 : Equipment $200,000. Therefore, office building represents 60%, Land 30%, and Equipment 10% of the cost.

Since the Office building costs $1,080,000, using the above fair values ratio, this cost represents 60% of the total.

Therefore, the total cost will be $1,800,000 ($1,080,000/60 X 100).

The total purchase cost for all three assets is obtained using the proportion method of cost allocation based on the given fair values.

6 0

4 years ago

Opportunity cost can also be defined as the __________ cost of a decision.