Answer: The current price of the bond is $258.74
Explanation:
The present value of the bond is its Current Price
We would use the following formua to calculate the Current Price of the bond,
PV = 
+ A ![[\frac{1-\frac{1}{(1+r)^{N} } }{r} ]](https://tex.z-dn.net/?f=%5B%5Cfrac%7B1-%5Cfrac%7B1%7D%7B%281%2Br%29%5E%7BN%7D%20%7D%20%7D%7Br%7D%20%5D)
Where,
FV = Face value = $1,000
A = Coupon payment paid semi annually = (8% x 1000) / 2 = $40
r = Yield to Maturity = 16%
N = Number of periods = 15 years x 2 = 30 semi-annual periods
PV = 
+ 40 ![[\frac{1-\frac{1}{(1+0.16)^{30} } }{0.16} ]](https://tex.z-dn.net/?f=%5B%5Cfrac%7B1-%5Cfrac%7B1%7D%7B%281%2B0.16%29%5E%7B30%7D%20%7D%20%7D%7B0.16%7D%20%5D)
PV = 258.73618
Answer:
Correct answer is FALSE
Explanation:
FOB Destination transfers ownership of the goods to the buyer after the goods reached to its destination (either in the buyer’s warehouse or any place stated in the contract to be delivered). Thus, goods in-transit under FOB destination still belongs to the seller and not to the buyer yet. Moreover, it should not be included to buyer’s inventory because the title of ownership of the said goods still belongs to the seller at the time of transit.
Answer:
Explanation:
Right to work laws are designed so that no one is compelled to join a union.
So the answer is A. give workers in a unionized firm the right to choose whether to join the union.
Answer:
a.
The WACC is 9.4875%
b.
The after tax cost of debt is 3.25%
Explanation:
The WACC or Weighted average cost of capital is the cost to a firm of its capital structure based on the weighted average of costs of all the components that form up its capital structure. The components in a firm's capital structure are debt, preferred stock and common stock.
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component in the overall capital structure
- r represents the cost of each component
- we multiply the cost of debt by (1 - tax rate) to take the after tax cost of debt
a.
WACC = 0.15 * 0.05 * (1-0.35) + 0.15 * 0.04 + 0.7 * 0.12
WACC = 0.094875 or 9.4875%
b.
The after tax cost of debt is calculated by multiplying the cost of debt or rD by (1 - tax rate).
After tax cost of debt = 0.05 * (1 - 0.35) = 0.0325 or 3.25%
