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olga2289 [7]
3 years ago
10

Amram Inc. can issue a 20-year bond with a 6% annual coupon at par. This bond is not convertible, not callable, and has no sinki

ng fund. Alternatively, Amram could issue a 20-year bond that is convertible into common equity, may be called, and has a sinking fund. What most accurately describes the coupon rate that Amram would have to pay on the second bond, the convertible, callable bond with the sinking fund, to have it sell initially at par?
Business
1 answer:
tino4ka555 [31]3 years ago
3 0

Answer:

b. It could be less than, equal to, or greater than 6%.

Explanation:

THIS ARE THE OPTIONS FOR THE QUESTION BELOW!

a. Exactly equal to 6%.

b. It could be less than, equal to, or greater than 6%.

c. Greater than 6%.

d. Exactly equal to 8%.

e. Less than 6%.

Convertible bonds can be regarded as one which can be converted to equity shares at a particular time, so in this case, Base on specific terms set the coupon rate can be equal, greater even less than 6%, talking of real world, the feature of the convertible could make the coupon rate to be probably less than 6%.

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Rafi, a director of Super Service Station Corporation, does not attend a board meeting for three years. During that time, Twyla,
Varvara68 [4.7K]

Answer:

a. liable for negligence or mismanagement.

Explanation:

Given that,  

The cost of the improper loans = $100,000

Since the director of the Super Service Station Corporation does not attend a board meeting for three years plus the president Twyla had done the improper loans that reflect the mismanagement as without knowing the credit history of the people how it could make the loans.  

Moreover, there is no guarantee of returning the money so he is totally liable for his negligence or mismanagement

8 0
3 years ago
Which of the following would you list as an "Essential (Fixed)" expense?
11Alexandr11 [23.1K]

Out of the above choices I would Asnwer. D Rent. Rent is an Essential (fixed) expense. The other expenses electricty, telephone and car repair are all variable expenses because they normally are net set rates every month. Due to the changng of amounts these expenses fluxtuate not allowing thme to be a fixed expense like rent is.

4 0
3 years ago
Read 2 more answers
Suppose that lenders want to receive a real rate of interest of 5 percent and that they expect inflation to remain steady at 2 p
Helga [31]

Answer:

7%

Explanation:

nominal interest rate = real interest rate + expected inflation rate

nominal interest rate = 5% + 2% = 7%

Usually the nominal interest rate has four major components:

  1. real interest rate: the net interest rate received by a lender or an investor
  2. inflation rate: the general rise in the prices of goods and services, as inflation increases, the purchasing power of a currency decreases
  3. liquidity risk premium: usually collateralized loans include a liquidity risk premium since not all assets can be easily converted to cash.
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7 0
3 years ago
Financial statements are prepared: Group of answer choices For corporations, but not for sole proprietorships or partnerships. P
telo118 [61]

Answer:

Primarily for the benefit of persons outside of the business organization.

Explanation:

Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, account payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB). The financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining standard financial accounting and reporting for general guidance of individuals such as investors, issuers and auditors.

Financial reporting can be defined as the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors.

Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. Thus, it includes balance sheet, statement of retained earnings and income statement. The information that are found in a financial statement are revenues, expenses, liability, equity and assets.

Hence, the primary objective of financial accounting is to provide accounting information for external users so as to enable them have a good understanding of the financial inclination of a business firm and thus, make an informed decision whether or not to invest in the business firm.

In Accounting, the external users of a financial accounting information includes customers, creditors, investors shareholders and government regulators.

8 0
2 years ago
Suppose a bond with a 10% coupon rate and annual coupons, has a face value of $1,000, 5 years to maturity and is selling for $1,
Taya2010 [7]

<u>Solution and Explanation:</u>

1. the Yield to maturity

FV = 1,000

PMT = FV multiply with Coupon rate , PMT = 1,000 multiply with 0.1 = 100

N = 5 , PV = -1,197.93

CPT I/Y

I/Y = 5.380166647

Therefore, the Yield to maturity = 5.380166647%

Where: FV – fair value, PV – Present value

2. Current yield = Coupon payment divided by Price

Current yield = 100 divided by 1,197.93

By solving we get,

Current yield = 0.08347733173

Therefore, the Current yield = 8.347733173%

7 0
3 years ago
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