QUESTION 13

. General Motors’s bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $ 1,000 par value, and

pshichka [43]

Answer:

Present value of the bonds 935.82

Explanation:

We have to calculate the present value of the coupon interest service

and the face value redeem at maturity.

$C \times \frac{1-(1+r)^{-time\times} }{rate} = PV\\$

C = 1000 x 0.8 = 80

rate = 9%

time = 10

$80 \times \frac{1-(1+0.08)^{-10} }{0.08} = PV\\$

PV = 513.41262

$\frac{Face}{(1 + rate)^{time} } = PV$

Face Value = 1000

rate = 0.09

$\frac{1000}{(1 + 0.09)^{10} } = PV$

PV = 422.410807

<u>Present value of the bonds </u>

annuity PV + face PV = market price

513.41262 + 422.410807 = 935.823427 = 935.82 market value

5 0

4 years ago

Suppose when you are 21 years old, you deposit $1,000 into a bank account thatpays annual compound interest, and you do not with

Fofino [41]

Answer:

The difference between the two rates is $4,428.33.

Explanation:

When the interest is compounded, it is calculated over the value of the investment at the end of the previous year. So, value at year 1 will be 1,000*(1+rate). At second, it will be 1,000*(1+rate)*(1+rate), or 1,000 * (1+rate)^2.

If we extend the analysis, at year 44, the investment will be worth 1,000*(1+r)^44.

If rate is 5 percent, the result of the deposit is 1,000*1.05^44 = 8,557.15

If rate is 6 percent, the result of the deposit is 1,000*1.06^44 = 12,985.48

The difference is 4,428.33.

8 0

4 years ago

You are given the following information concerning two stocks that make up an index.

ExtremeBDS [4]

Answer:

111

Explanation:

Given that,

Beginning index value = 100

Beginning value:

= Kirk, Inc. + Picard Co.

= (No. of shares outstanding × Price per share)

= (40,000 × $38) + (28,500 × $73)

= $1,520,000 + $2,080,500

= $3,600,500

Ending value:

= Kirk, Inc. + Picard Co.

= (No. of shares outstanding × Price per share)

= (40,000 × $42) + (28,500 × $81)

= $1,680,000 + $2,308,500

= $3,988,500

Index level at the end of the year:

= (Ending value ÷ Beginning value) × Beginning index value

= ($3,988,500 ÷ $3,600,500) × 100

= 1.11 × 100

= 111

5 0

3 years ago

Lately, Marcus has noticed a lot of customer complaints that items purchased from his web store don't meet expectations. What im

kotykmax [81]

The improvement to this website that would best help to solve the problem so that customers would know what best to expect are High-quality product photos.

The issue is that there is disconnection between what the customers see and what they get.

In order to meet with customer complaints, Marcus has to listen to the problems that they seem to be having.

Then he has to effect the required changes by creating a connection between what his customers see and what they get.

6 0

3 years ago

Corporate-level strategy is concerned with ____ and how to manage these businesses. a. whether the portfolio of businesses shoul

bazaltina [42]

Answer:

c. what product markets and businesses the firm should be in

Explanation:

A corporate level strategy focuses on the goals of the company which shall affect the entire organisation, and involves further the entire participation at the company level to achieve such targets from such strategy.

This involves the strategy to calculate properly what is beneficial to the company and what is not beneficial.

Thus, the company considers to what it shall manufacture and what business it should do, in order to attain maximum growth in market.

8 0

3 years ago