Answer:
Bondholders have a degree of legal protection against default risk, but it is not comprehensive.
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.
The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.
In Economics, bonds could either be issued at discount or premium. A bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance while a bond that is issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.
Default risk in bonds refer to the risk that a bond issuer (borrower) is unable to pay the principal or interest agreed upon in the contract with the bondholder (lender) in a timely manner.
Hence, the true statement about default risk is that bondholders have a degree of legal protection against default risk, but it is not comprehensive.
When moving up along an existing supply curve all variables other than price are held constant
Answer:
Explanation:
The most likely reason for Walmart to support this technology is that it will allow them to track and process items from their suppliers at a much more efficient rate. Since RFID technology uses radio waves to read and capture information stored on a tag attached to an object, providing a unique identifier for an object. These unique tags allow each individual item to be tracked throughout the whole process from supplier to warehouse to client. Thus preventing losses and reducing costs.
Answer:
Option (D) 41.86 % for debt, 58.14% for equity
Explanation:
Market value of debt = $24 million × 120%
= $24 million × 1.20
= $28.8 million
Market value of equity = 2 million shares × $20 per share
= $40 million
Therefore,
Total = $28.8 million + $40 million
= $68.8 million
Therefore
,
Weight of Debt = [ Market value of debt ÷ Total ] × 100%
= [ $28.8 million ÷ 68.8 million ] × 100%
= 41.86%
Weight of Equity = [ Market value of equity ÷ Total ] × 100%
= [ $40 million ÷ 68.8 million ] × 100%
= 58.14%
Hence,
Option (D) 41.86 % for debt, 58.14% for equity