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olga_2 [115]
3 years ago
15

Tropical Resort, Inc.'s bonds currently sell for $1,350 and have a par value of $1,000. They pay an 11% coupon rate with interes

t paid semi–annually, and have a 15-year maturity, but they can be called in 7 years at $1,125. What is their yield to call (YTC)?
Business
1 answer:
IRINA_888 [86]3 years ago
4 0

Answer:

Their yield to call is 8.672%

Explanation:

The rate of return bondholders receives on a callable bond until the call date is called Yield to call.

Use following formula to calculate the yield to call

Yield to Call = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

Where

C = Coupon Payment = $1,000 x 11% x 6/12 = $55

F = Face value = $1,000

P = Call price = $1,125

n -= number of periods to call = 7 years x 2 = 14 periods

Yield to Call = [ $55 + ( $1,000 - $1,125 ) / 14 ] / [ ( $1,000 + $1,125 ) / 2 ]

Yield to Call = 46.07 / $1,062

Yield to Call = 0.04336

Yield to Call = 4.336% semiannually

Yield to Call = 4.336% x 2

Yield to Call = 8.672% annually

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poizon [28]

Total sales = $200,000. Net income = $20,000. Dividend payout ratio = 30%. Operating cash flow = $40,000. Price per share = $100. Shares outstanding = 1,000.

<h3>What is Dividend payout ratio?</h3>

Investors can get a sense of a company's dividend payout ratio by comparing it to the amount of money it maintains on hand for growth, debt repayment, and cash reserves.

Using the data available at the bottom of a company's income statement, this ratio can be determined quickly. The dividend yield, on the other hand, contrasts the dividend payment with the stock price of the company at the time of the comparison.

How much is paid out in dividends can be determined using the dividend payout ratio.

This computation enables businesses to determine how much cash is available (after dividends are paid) for debt repayment or reinvested.

The income statement of a corporation is used to compute this ratio.

To learn more about Dividend payout ratio from the given link:

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5 0
2 years ago
Sharpe Knife Company expects sales next year to be $1,550,000 if the economy is strong, $825,000 if the economy is steady, and $
aleksley [76]

Answer:

The expected level of sales for the next year is $960000

Explanation:

The expected sales will be calculated based on the probabiltiy of the economic condition multiplied by sales in that economic condition.

The expected sales for the next year will be,

Expected sales = 1550000 * 0.3 + 825000 * 0.4 + 550000 * 0.3

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7 0
3 years ago
In a market economy, why must the government play a primary role in dealing with pollution, vaccinations, and medical research
stealth61 [152]

Answer:

Explanation:

The government needs to be on top of these situations because each of these factors plays a huge role in the wellness and size of a population. A market economy needs a certain healthy and large population in order to function correctly. The population needs to produce the products and services while at the same time purchasing those products and services from one another in order for the market cycle to function. If such factors as disease and pollution make people sick it will severely cripple the market economy.

4 0
3 years ago
Bundling raises higher revenues than selling the goods separately when:
Aleonysh [2.5K]

Answer:

B. there is a perfect positive correlation between the demands for two goods.

Explanation:

Bundling is a technique of combining two or more products and selling them together as one package.

This technique is most commonly used by many companies like Microsoft, McDonald's, etc.

Sometimes, the strategy of bundling doesn't pay off in some endeavours as the companies might not make profit or not make as much profit as was originally projected.

Other times, it has paid off handsomely.

À company can decide to bundle products like a mouse, a keyboard, a USB drive and a monitor to sell as one package and not sell them individually, this is known as "pure bundling".

There is an increase in revenue when the change in value of one of the product in the bundle is equally proportional to the change in value of the other product in the bundle.

6 0
3 years ago
This graph compares the cost of an education at different institutions in Texas.
ELEN [110]

Answer:

private universities can cost three times as much to attend as public universities.

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Private universities are more expensive to attend compared to public universities. As per the graph, the public university is cost 7,000 while private university costs 23,000 to attend.  It is then correct to say that private universities cost more than three times as public universities ( 23,000/7,000= 3.29).

Community college costs 9000, while technical schools cost 4000; the cost is not five times more.

Technical schools 4,000 and community colleges are 9000; the costs are only two and a half more.

7 0
4 years ago
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