1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
xenn [34]
2 years ago
13

RAK Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 5.7 percent coupon b

onds on the market that sell for $1,048, have a par value of $1,000, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par
Business
1 answer:
Hatshy [7]2 years ago
7 0

Answer:

5.31%

Explanation:

FV = 1000

Coupon rate = 5.7%

No of compound = 2

Interest per period = $28.5

Bond price = $1048

No of years to maturity = 20

No of compounding till maturity = 40

Coupon rate set on new bonds = Rate(Nper, PMT, -PV, FV) * 2

Coupon rate set on new bonds = Rate(40, 28.5, -1048, 1000) * 2

Coupon rate set on new bonds = 0.02655 * 2

Coupon rate set on new bonds = 0.0531

Coupon rate set on new bonds = 5.31%

You might be interested in
A small business decides to upgrade its aging phone system. the business will probably place a straight rebuy order.
natulia [17]
False.
The business wants to upgrade the phone system, not rebuy the same one.
8 0
2 years ago
Grateful Eight Co. is expected to maintain a constant 4.6 percent growth rate in its dividends indefinitely. If the company has
ad-work [718]

Answer:

11%

Explanation:

To address this exercise, we need to recall the formula for dividend discounted model (DDM). The DDM is stated as below:

Stock intrinsic value = Next year dividend/(Required rate of return - Long term growth)

Rearrange a bit this formula, we have:

Next year dividend/Stock intrinsic value = Required rate of return - Long term growth, or

Dividend yield = Required rate of return - Long term growth

Putting all the number together, we have:

6.4% = Required rate of return - 4.6% or Required rate of return = 11%

7 0
3 years ago
Three Guys Burgers, Inc., has offered $18 million for all of the common stock in Two Guys Fries, Corp. The current market capita
Pavlova-9 [17]

Answer:

Annual synergy gain = $ 178,500

Explanation:

Value of synergy gain from acquisition = 18 - 15.9 = 2.1 million

Annual synergy gain = 2.1 *.085 = .1785 million or $ 178,500

Annual synergy gain = $ 178,500

3 0
2 years ago
To have an effective marketing exchange process, you must make sure it involves a customer, a provider, a product, and a:
Travka [436]

Answer:

Transaction

Explanation:

Marketing exchange process refers to a process wherein two or more individuals buy or sell a good. Exchange refers to the consideration which is paid in return for the product i.e money.

For any exchange to take place it is essential that the good is transacted.

Customer would be the one who requires the product or the ones who create a want.

A Provider is the one who satisfies a want or say the one who makes the product available.

Product is the bundle of utilities or attributes which satisfies a want.

Transaction is effected when the buyer gets the product and the seller gets paid for the product.

7 0
3 years ago
Which document determines the number of shares in a company? a stock prospectus an annual bill of rights a corporate charter an
Nezavi [6.7K]

Answer: Corporate charter

Explanation:

The corporate charter is also referred to as the articles of incorporation. It is a document that contains the major components that make up a company, like the objectives of the company, the structure of the company, the number of shares the company has for sale and the planned operations of the company.

When a corporate charter is approved by the state, then the company will become a legal corporation. The corporate charter also contains the names of the people that are involved in its formation.

5 0
3 years ago
Read 2 more answers
Other questions:
  • A study sponsored by the american medical association suggests that the absolute value of the own price elasticity for surgical
    8·1 answer
  • A nurse is caring for an older adult client with advanced Parkinson's disease. Which client statement about advance directives i
    8·1 answer
  • You would like to borrow money three years from now to build a new building. In preparation for applying for that loan, you are
    10·1 answer
  • Suppose the quantity demanded of a particular good increases by 30%, and (the absolute value of) the price elasticity of demand
    12·1 answer
  • The Assembly Department had 4 comma 500 units of beginning inventory in September​, and 6 comma 000 units were transferred to it
    10·1 answer
  • A. How much would you pay for a Treasury bill that matures in 182 days and pays $10,000 if you require a 1.8% discount rate?
    11·1 answer
  • Allocating common fixed expenses to business segments: Multiple Choice may cause managers to erroneously keep business segments
    13·1 answer
  • Tucan Company manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $300 per o
    11·1 answer
  • Suppose that a couple of months after the new pizza restaurant opens, the local government institutes a $14 per pizza price ceil
    9·1 answer
  • Say’s law argues that a given ____________________ must create an equivalent ________________________ somewhere else in the econ
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!