Answer:
SEGMENTATION
Explanation:
The important elements involved of a firms business model are its TARGET market basis for differentiation and it segmentation these three elements involved results into important elements of a business model.
Answer: 21.63%
Explanation:
The firm's cost of equity capital will be calculated thus:
Market value of assets = $50000
Debt = $12500
Cost of debt = 7%
Unlevered cost of equity = 18%
Then, we'll calculate equity which will be calculated as:
= Market value of assets - Debt
= $50000 - $12500
= $37500
Then, the cost of equity capital will be:
= Unlevered cost of equity + [(Debt/equity) x (Unlevered cost of equity - Cost of debt)]
= 18% + [($12500/$37500) x (18% - 7%)]
= 18% + [0.33 x 11%]
= 18% + 3.63%
= 21.63%
Answer:
The answer is 7.37%
Explanation:
Solution
Given that
Bond per value = future value =$1000
The current price = $1,066.57
Time = 22 years * 2
=44 semi-annual periods
The year of maturity = 6.78%/2 = 3.39%
Thus
The coupon rate is computed by first calculating the amount of coupon payment.
So
By using a financial calculator, the coupon payment is calculated below:
FV= 1,000
PV= -1,066.57
n= 44
I/Y= 3.39
Now we press the PMT and CPT keys (function) to compute the payment (coupon)
What was obtained is 36.83 (value)
Thus
The annual coupon rate is: given as:
= $36.83*2/ $1,000
= $73.66/ $1,000
= 0.0737*1,00
=7.366% or 7.37%
Therefore 7.37% is the bond's coupon rate.
Answer: Option (1) is correct.
Explanation:
If the interest rate in a home country is lower than the U.S rate of interest then the government and firms of home country won't demand for U.S. funds as it will become expensive for the corporations to borrow funds from U.S. at such a higher rate. Hence, less demand for U.S funds.
There is an inverse relationship between the U.S. interest rate and foreign demand for U.S. funds. If there is an increase in the U.S. interest rate as a result foreign demand for U.S. funds decrease. As it will be not affordable for the borrowers to take funds at a higher rates.
