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3 years ago

How is a line of credit similar to a credit card?

2 answers:

8 0

The right answer for the question that is being asked and shown above is that: "a. Interest is charged only on the amount you actually borrow." a line of credit similar to a credit card is that a. Interest is charged only on the amount you actually borrow.

FrozenT [24]3 years ago

3 0

Answer: a. Interest is charged only on the amount you actually borrow.

Explanation:

A line of credit (LOC) is known to be a certain amount of money agreed upon by a financial institution which enables an individual to borrow money. The borrower can only borrow the money up to the maximum amount agreed upon.

Credit card is a card issued by a financial institution to a card holder in order to pay for the goods and services purchased. The money is been paid back by the card holder with the interest rate and other charges at the stipulated time agreed upon.

Interest rate is the amount of money a lender or financial institution receives on the money borrowed to a borrower. Hence, interest is charged only on the amount a card holder borrows on a line of credit or credit card account.

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Vital Silence Corp. has just issued a 30-year callable, convertible bond with a coupon rate of 6.4 percent and annual coupon pay

Aleks04 [339]

Answer:

a. $880.74

b. 13 years

Explanation:

a. Conversion ratio = Current Value of bond / Conversion price = 1,000 / 93.4 = 10.71

Conversion price of bond = 10.71 × 28.60 = $306.31

Coupon = Par value of bond * Coupon rate = $1,000 * 6.4% = $64

Present value of straight debt is calculated below:

Present Value = $64 × [1-(1+7.4%)^-30 / 7.4%] + [$1,000 / (1+7.4%)^30]

= $64*11.93 + $117.46

= $763.28 + $117.46

= $880.74 .

Therefore, the minimum value of bond is $880.74

b. Conversion ratio = 10.71

Current stock price = $28.6

Suppose number of year the stock will take to reach above $1,140 is t.

Conversion value = Current stock price * Conversion ratio*(1+10.8%)^t

$1,140 = $28.6 * 10.71 * (1.108)^t

(1.108)^t = 3.7218

t = 12.8145 year.

t = 13 years

8 0

3 years ago

Ray Stokes is raising capital for a new company called NO Balloons Inc. NO Balloons will manufacture and sell festive balloons.

Sergeeva-Olga [200]

Answer:

NO Balloons' WACC = 7%

Explanation:

WACC = Weighted average cost of capital

The weighted average cost of capital (WACC) refers to calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.

Respective calculation of WACC:

Step 1: Calculate the value of equity:

Number of shares = 12 million

Share price = $19.5 per share

Value of equity = 12 million shares * 19.5/share = $234 million (A)

Step 2: Calculate the value of debt:

Bonds = 200,000

Value of debt = 200,000 bonds * 1000 face value/bond * 89% sale price = 178 million (B)

Step 3: Calculate the firm value:

Total firm value (A+B) = 234 + 178 = 412 million

Step 4: Calculate the weight of equity:

Dividing the value of equity to total firm value:

Weight of equity = 234 / 412 = 0.5680

Step 5: Calculate the weight of debt:

Dividing the value of debt to total firm value

Weight of debt = 178 / 412 = 0.4320

Step 6: Calculation of WACC :

WACC = weight of equity * cost of equity + weight of debt * cost of debt = 0.5680 * 9.275% + 0.4320 * 4% = 7%

7 0

3 years ago

When companies study the possibility of moving to the Cloud, they often perceive that security is a roadblock to making things h

Georgia [21]

Answer:

Informing client of Accenture's firewall smart an innovative technology deployed right from the off in other to check and prevent security throughout the integration process.

Explanation:

Accentre should tell client about the companies model on how they intend to tackle such security concerns associated with the cloud. This is what a client whose fear is about security wants to hear. Once, Accenture explains how to the client about their early integration framework coupled with innovative technologies and firewalls geared at checking and preventing security breach, the client should be convinced and his fears allayed.

6 0

2 years ago

The ___ show(s) the quantity of a good consumers would be willing and able to purchase at a given time for a range of prices whi

finlep [7]

Answer:

a) demand curve and demand schedule

Explanation:

A demand schedule is actually a table while a demand curve is a graph. Understanding the difference between the two of them is important in answering this question but both show different quantities of goods that consumers are willing to buy at different prices. An important assumption is that other factors affecting the quantity demanded are held constant. In summary, a demand schedule shows this relationship in a tabular form while demand curve shows it in a graphical form.

3 0

3 years ago

What is the primary purpose of a mission statement?

natka813 [3]

Its c good luck and hope that helps

3 0

3 years ago