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chubhunter [2.5K]
3 years ago
14

Ruth Lewis is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market int

erest rate for similar investments is 11.5 percent. Assume annual coupon payments. What is the current value of this bond
Business
1 answer:
bearhunter [10]3 years ago
7 0

Answer:

Bond Price = $580.2640476 rounded off to $580.26

Explanation:

A zero coupon bond is a kind of bond that does not pay interest to the bond holder like other bonds. Instead it is offered at a discount price and pays the par value at maturity. The discount price is calculated using a certain rate which can also be called the implied interest rate on this zero coupon bond. The formula to calculate the price of the zero coupon bond is,

Bond Price = Par Value / (1 + r)^t

Where,

  • r is the interest rate or the discount rate
  • t is the number of periods to maturity

Bond Price = 1000 / (1+0.115)^5

Bond Price = $580.2640476 rounded off to $580.26

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Several months after the reorganization, Jim Umpleby checks in with department managers to see how their employees are handling
Nat2105 [25]

Answer:

The correct answer would be options A and B.

Explanation:

When a company is in financial trouble or faced a bankruptcy, then a process of reorganization is used in an attempt to extend the life of the company through some special arrangement to make the organization successful and progressive.

In this question, Jim wants to know how employees of the company think of the new structure after the reorganization. So the best method to talk to employees directly is to give them a surprise visit and talk to them about the reorganization. Also town hall meetings should be arranged to meet the employees one on one in an informal gathering and talk to them about the reorganization.

6 0
3 years ago
The merger of two firms producing personal computers is an example of a __________ merger. Group of answer choices
jasenka [17]

Answer:

Horizontal merger

Explanation:

The merger of two firms producing personal computers is an example of a horizontal merger

A horizontal merger is a merger or business collaboration that happens between firms that operate in the same industry. The products being sold are similar and in the same market

4 0
3 years ago
Steve Colburn's portable sawmill used 100% for business, was completely destroyed by fire. The sawmill had an adjusted basis of
pashok25 [27]

Answer: $35,000

Explanation:

A casualty loss is simply a loss that an individual or business incurs when a property is damaged, or destroyed due to an unexpected or sudden event like fire, volcanic eruption, flood etc.

Here, Steve's casualty loss will be gotten when we compare both his adjusted basis and the fair market value and then we choose the lesser one. Since $35000 is lesser than $50000, therefore the answer will be $35000.

8 0
3 years ago
A firm has the following accounts and financial data for 2007:
Oksi-84 [34.3K]

Answer:

The correct answer is $302.40.

Explanation:

According to the scenario, the computation can be done as:

To calculate firms' earning first we less cost of goods and total operating expenses from sales revenue:

= $3,060 - $1,800 - 600

= $660

Now we deduct the interest expense, then

= $660 - $126

= $534

Now we deduct tax rate, then

= $534 × $213.60    ( $534× 40%)

= $320.40

Now we finally deduct the dividends to get the firm's earning to common shareholder's, then

= $320.40 - 18

= $302.40

Hence, the firm's earning to common shareholder's is $302.40.

5 0
4 years ago
Strategy implementation can be the most difficult part of the strategic management process. Which of the following is not likely
RUDIKE [14]

Answer:

d) Competition

Explanation:

According to  Rajasekar, J. (2014). <em>Factors affecting effective strategy implementation in a service industry</em> Strategic management process key factors are the role of leadership, the role of culture and the role of organizational structure in strategy implimentation.

On the other hand, "the absence of real competition is either not aware of the need to formulate a strategy and implement it (clarity of strategy) or believe there is no need to do so due to the business structure" (p.177)

Reference: Rajasekar, J. (2014). Factors affecting effective strategy implementation in a service industry: A study of electricity distribution companies in the Sultanate of Oman. International Journal of Business and Social Science, 5(9).

3 0
3 years ago
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