Answer:
Explanation:
Yield on 1 year trasury bond: r1=4.25+3.5 = 7.75%
Now, yield is r3 = 7.75+1.5 = 8.25%
r3=r*+inf
8.25=3.5+inf
inf=4.75%
4.75 = (4.25+i+i)/3
14.25 = 4.25 +2i
2i = 10
i = 5%
Inflation expected after year 1 is 5%
Answer:
The answer is $41.67
Explanation:
Po = D1/r - g. This formula is called Discount Dividend Model and it is one of the methods used in valuing company's stock.
Po is the present or current value of the stock
D1 is the next year dividend payment
r is the discount rate
g is the growth rate.
Po = $5.00 /0.16 - 0.04
= $5.00/0.12
=$41.67
Therefore, the current stock price is $41.67
Answer:
a ) Probability of default of debt over the time to maturity is 12.92%
(b ) Expected loss: $39.53
(C ) Present value of expected loss is $45.59
Explanation:
a ) Probability of default of debt over the time to maturity is 12.92%
(b ) Expected loss: $39.53
(C ) Present value of expected loss is $45.59.
Values calculated as shown in my detailed step by step answer at the attachment.
please kindly refer to attachment.
The customer changing their mind or the customer not having enough money
Answer:
The bond interest expense to be shown in profit or loss as t 30 June 2021
$9,838.56
Explanation:
The bond interest expense is the actual finance cost of using the funds made available by bondholders while the coupon payment is the portion of the finance cost paid to them periodically.
Interest expense=bonds cash proceeds*yield to maturity*6/12
bonds cash proceeds is $163,976
yield to maturity is 12%
interest expense=$163,976*12%*6/12=$9,838.56
