1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ZanzabumX [31]
3 years ago
14

New Business Ventures, Inc., has an outstanding perpetual bond with a coupon rate of 11 percent that can be called in one year.

The bond makes annual coupon payments and has a par value of $1,000. The call premium is set at $125 over par value. There is a 60 percent chance that the interest rate in one year will be 13 percent, and a 40 percent chance that the interest rate will be 9 percent. If the current interest rate is 11 percent, what is the current market price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Virty [35]3 years ago
8 0

Answer:

961.88

Explanation:

First, examine whether the bond will be called if interest rate falls to 9%. The call price is

1,000 + 125 = 1,222. Bond price at 9% yield will be

$110/0.13 > call price of 846.15

Bond will be called. The price of the callable bond therefore is:

=+[.60(846.15)+.40(1125)]/1.11+110/1.11 =961.88

You might be interested in
A disclosed principal is a principal whose identity is known by a third party with whom an agent contracts on the principal's be
Sedaia [141]

Answer: The correct answer is true.

Explanation: A disclosed principal is a principal whose identity is known by a third party with whom an agent contracts on the principals behalf, making this statement true.

7 0
3 years ago
The R&D department at Parabola Inc. is developing innovative methods to develop products that would reduce resource wastage.
mihalych1998 [28]

Answer:

b) Lateral Thinking

Explanation:

Lateral thinking is the approach where creative and innovative ways are thought out. In this approach, problem solvers deliberately distance themselves from generic and classic approaches and thus try to come up with brand new ideas and not follow typical thinking patterns.

All the other options can be used to find solutions but they may not necessarily take this innovative approach.  

Hope that helps.

6 0
3 years ago
How are most travel itineraries arranged?
bekas [8.4K]
Event by event so you know the schedule

4 0
3 years ago
Alma owns fifty shares of common stock in Alpha Corporation. Alma also owns eighty shares of preferred stock in the same corpora
andreyandreev [35.5K]

Given the situation described above, Alma will be able to cast <u>50 votes</u>.

This is because common stock gives voting rights to shareholders. And given that Alma has 50 shares of common stocks. Therefore, he would be able to cast 50 votes.

On the other hand, preferred stocks give no voting rights to shareholders.

However, preferred shareholders have preference over a company's revenue or earnings, which implies that they are paid dividends before common shareholders.

Hence, in this case, it is concluded that the correct answer is "50 votes."

Learn more here: brainly.com/question/3518273

3 0
2 years ago
Bill heard, as part of the _____ curriculum in his school, that certain races were not as good as others, and that coolness was
Alik [6]
<span>Bill heard, as part of the corridor curriculum in his school, that certain races were not as good as others, and that coolness was the key to everything. corridor curriculum means what students teach one another outside of the class room,usually negative.</span>
7 0
3 years ago
Other questions:
  • Do an interview with a business owner and request him / her to identify any business problem that they are experiencing
    15·1 answer
  • Borstorff and her associates examined a number of factors related to employee willingness and concluded that married couples wit
    8·1 answer
  • You are the CEO of a small firm that manufactures office furniture. The decision-making authority in your firm rests almost enti
    6·1 answer
  • What was the major financial change between post-World War II borrowers and borrowers after 1970?
    14·1 answer
  • Canada is currently the second largest producer of nickel in the world. The recent reopening of the world famous Voisey's Bay mi
    8·1 answer
  • Suppose the marginal propensity to consume is 0.8 and the government votes to increase taxes by $3 billion. Round to the nearest
    5·1 answer
  • In the context of organizational environments, which of the following is true of mechanistic organizations? a. They are characte
    6·1 answer
  • A ________ is an unsecured bond, and most of the bonds sold today in the United States are of this type.A) mortgage bondB) deben
    8·1 answer
  • List three (3) Safety measures the cashier must take into consideration when doing/making a lodgment at any Financial Institutio
    8·1 answer
  • If the united states government lowers the income taxes on the wealthiest americans, while decreasing welfare payments to the po
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!