Process which is followed to monitor the movement of stock in a company

Both Bond Sam and Bond Dave have 7.3 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has three

Zarrin [17]

Answer:

Sam change: -5.13%

Dave change -18.01%

Explanation:

If interest rate increase by 2%

then the YTM of the bond will be 9.3%

We need eto calcualte the present value of the coupon and maturity of the bond at this new rate:

For the coupon payment we use the formula for ordinary annuity

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

Coupon payment: 1,000 x 7.3% / 2 payment per year: 36.50

time 6 (3 years x 2 payment per year)

YTM seiannual: 0.0465 (9.3% annual /2 = 4.65% semiannual)

$36.5 \times \frac{1-(1+0.0465)^{-6} }{0.0465} = PV\\$

PV $187.3546

For the maturity we calculate usign the lump sum formula:

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

Maturity: $ 1,000.00

time: 6 payment

rate: 0.0465

$\frac{1000}{(1 + 0.0465)^{6} } = PV$

PV 761.32

Now, we add both together:

PV coupon $187.3546 + PV maturity $761.3154 = $948.6700

now we calcualte the change in percentage:

948.67/1,000 - 1 = -0.051330026 = -5.13

For Dave we do the same:

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

C 36.50

time 40

rate 0.0465

$36.5 \times \frac{1-(1+0.0465)^{-40} }{0.0465} = PV\\$

PV $657.5166

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

Maturity 1,000.00

time 40.00

rate 0.0465

$\frac{1000}{(1 + 0.0465)^{40} } = PV$

PV 162.34

PV c $657.5166

PV m $162.3419

Total $819.8585

Change:

819.86 / 1,000 - 1 = -0.180141521 = -18.01%

6 0

3 years ago

The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package

Lemur [1.5K]

Answer:

1. Calculate each project's payback period.

Payback period packaging machine = the positive cash flows are lower than the initial outlay

Payback period molding machine = 4.45 years

2. Calculate the NPV for each project.

Using a financial calculator

NPV for packaging machine = -$4,178.24

NPV for molding machine = -$2,907.50

3. Calculate the IRR for each project.

IRR for packaging machine = -0.86%

IRR for molding machine = 3.5%

4. If the two projects are independent of each other, which projects, if any, should be selected? Explain why or why not.

None should be selected since the NPVs are negative

5. If the two projects are mutually exclusive, which project, if any, should be selected? Explain why.

None should be selected since the NPVs are negative

3 0

3 years ago

Bramble Corp. reported net sales of $248,700, cost of goods sold of $146,900, operating expenses of $58,000, net income of $39,9

juin [17]

Answer:

profit margin is 16.0 %

gross profit rate is 39.6 %

Explanation:

given data

net sales = $248,700

cost of goods sold = $146,900

operating expenses = $58,000

net income = $39,900

beginning total assets = $473,900

ending total assets of $635,400

to find out

profit margin and gross profit rate

solution

we will apply here profit margin formula that is

profit margin = $\frac{net income}{sale} * 100$ ..............1

put here value

profit margin = $\frac{39900}{248700} * 100$

profit margin = 16.04 = 16.0 %

and

gross profit rate formula is

gross profit rate = $\frac{sales - cost of good }{sale} * 100$ ..............2

put here value

gross profit rate = $\frac{245700 - 146900}{248700} * 100$

gross profit rate is 39.72 = 39.6 %

5 0

3 years ago

Arielle, a successful banker and educator, has decided to retire, but she is very interested in staying involved with a company

earnstyle [38]

Answer:

overall strategic goals and approval of major decisions.

Explanation:

A board of directors are people that are selected to make decisions that are beneficial to shareholders and to ensure that the management of the organisation acts in the best interest of shareholders.

Directors asses the performance of the management and make major decisions such as acquisitions, issuing of new shares, company liquidation, and dividend declaration.

So Arielle will be involved in approval of major decisions and attainment of business goals as a member of the board of directors.

3 0

3 years ago

What is the best career to go for?

Soloha48 [4]

Answer: Well what things are you interested in?

Explanation:

6 0

3 years ago

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Process which is followed to monitor the movement of stock in a company​

Process which is followed to monitor the movement of stock in a company