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marta [7]
4 years ago
14

The bonds have a 7.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The

yield to maturity is 11%, so the bonds now sell below par. What is the current market value of the firm's debt?
Business
1 answer:
geniusboy [140]4 years ago
6 0

Answer:

$17,883,320

Explanation:

Rate of coupon 7.0% par value = FV$1,000Yrs to maturity 10 years Period/Yr2Periods = Years × 2 = N20Going annual rate = rd= YTM11.0%Periodic rate = rd/2 = I/YR5.5%Coupon rate × Par/2 = PMT$35.00Price of the bonds = PV$760.99. To Determine the number of bonds: Book value on balance sheet$23,500,000Par value$1,000Number of bonds = Book value/Par value23,500Calculate the market value of bonds:Mkt value = PV × Number of bonds = $17,883,320

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stellarik [79]

We can actually deduce here that a plant asset trade-in with commercial substance means that it changes the company's: Future cash flows.

<h3>What is cash flow?</h3>

In Business, cash flows actually refers to the amount of the net cash and its equivalent that is actually being moved or transferred in and out of the company.

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3 0
1 year ago
Solving for dominant strategies and the Nash equilibrium Suppose Nick and Rosa are playing a game in which both must simultaneou
slava [35]

Answer:

The only dominant strategy in this game is for <u>NICK</u> to choose <u>RIGHT</u>. The outcome reflecting the unique Nash equilibrium in this game is as follows: Nick chooses <u>RIGHT</u> and Rosa chooses <u>RIGHT</u>.

Explanation:

                                                  ROSA

                                     left                          right

                                    4 /                            6 /

                left                  3                              4

NICK                                                      

               right             6 /                             7 /

                                       7                               6

Rosa does not have a dominant strategy since both expected payoffs are equal:

  • if she chooses left, her expected payoff = 3 + 7 = 10
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Nick has a dominant strategy, if he chooses right, his expected payoff will be higher:

  • if he chooses left, his expected payoff = 4 +6 = 10
  • if he chooses right, his expected payoff = 6 + 7 = 13

The only possible Nash equilibrium exists if both Rosa and Nick choose right, so that their strategies are the same, resulting in Rosa earning 6 and Nick 7.

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3 years ago
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Answer:

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Heavy users also have an impact on light users because they can market the goods to light users whether indirectly or directly when they use so much of a business's goods and services.

It is therefore very important that the business knows of these heavy users so that they can focus marketing strategies on them as well as to offer them incentives that will keep them satisfied and coming back for more because if they don't act and they lose their heavy users, their revenues will see a significant drop.

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Answer:

The solution is shown in the table of the file attached herewith

Explanation:

Download docx
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