Answer:
Yield to call is 9.8%
Explanation:
The rate of return bonholders receives on a callable bond until the call date is called Yield to call.
Yield to Call = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
C = Coupon Payment = $105 per year
F = Face value = $1,000
P = Call price = $1,100
n -= number of years to call = 5
Yield to Call = [ $105 + ( $1,000 - $1,100 ) / 5 ] / [ ( $1,000 + $1,100 ) / 2 ]
Yield to Call = [ $105 - 2 ] / $1,050 = $103 / $1,050 = 0.098 = 9.8%
The decision to build the park or not would be based solely
on the cost – benefit relationship of this project. Since there is no other
factor considered in this problem, you only need to see if the benefit of
constructing the park would exceed its cost. In this problem, the cost to
construct the park is $20,000 while the marginal benefit would be $24,000
($8,000 x 3 families that can benefit from this project). Therefore, you can
say that the benefit has exceeded its cost. As a conclusion, the neighborhood
park should be built because it benefits the families living in that area more
than its cost.
Answer:
The answer is 2. Ten percent of the principal of the loan
Explanation:
By law, maximum commissions for first trust deed loans are at :
- 5% of the principal for loans less than 2 years or less than 3 years
- 10% of the principal for loans 3years and more.
Second trust deed loans, on the other hand, are stated at 5% for loans up to 2years, 10% for loans between 2-3 years and 15% for loans more than 3 years.
Answer:
The correct answer is $302.40.
Explanation:
According to the scenario, the computation can be done as:
To calculate firms' earning first we less cost of goods and total operating expenses from sales revenue:
= $3,060 - $1,800 - 600
= $660
Now we deduct the interest expense, then
= $660 - $126
= $534
Now we deduct tax rate, then
= $534 × $213.60 ( $534× 40%)
= $320.40
Now we finally deduct the dividends to get the firm's earning to common shareholder's, then
= $320.40 - 18
= $302.40
Hence, the firm's earning to common shareholder's is $302.40.
