This partnership is that they are not taking a chance that a bigger problem may occur because they are indirectly setting the ethics code for their firm. They had the right decision because if they hire illegal workers, then it will just damage their business.
Answer:
1. Current bonds price = $81.86.
2. Yield to maturity = 22.16%.
3. 3. Expected Return = 7.5%.
Explanation:
Required Rate = Rf + beta*MRP
= 5% + 0.25*(15% - 5%)
= 5% +0.25*10%
= 5% + 2.5% = 7.5%
Required Rate = 7.5%
Expected Future Value = 70% x $100 + 30% x $60
= (0.7*$100) + (0.3*$60)
= $(70+18) = $88
Expected Future Value = $88
1. Current bonds price = 88/1.075 = $81.86
2. Yield to maturity = 100/81.86 - 1 = 1.22159785-1 = 0.22159785 = 22.159785% = 22.16%
3. Expected Return = 7.5%
Answer:
the amount that willing to pay is $44,591.11
Explanation:
The computation of the amount that willing to pay is as follows:
The Present Value of an Ordinary Annuity is
= Amount × [{1 - (1 ÷ (1 + rate of interest)^n} ÷ rate of interest]
= $1,000 × [{1 - (1 / (1 + 0.065 ÷ 4)^100} ÷ 0.065 ÷ 4]
= $44,591.11
Hence, the amount that willing to pay is $44,591.11
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
b. 9.01%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,080
Future value or Face value = $1,000
PMT = 100
NPER = 15 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the yield to maturity is 9.01%
Answer: II. premium price
A bond which has a market price higher than its face value is said to be trading on a premium price. Which means that people are willing to pay more to buy the bond.
IV. yield-to-maturity that is less than the coupon rate
This is also correct because a bond sells higher than its face value when the yield to maturity also known as the bonds internal rate of return is lower than the coupon rate, which means that the bond is paying higher coupons than it needs to attract investors, and because of this investors are willing to pay a premium on it.
Explanation:
