1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ad libitum [116K]
2 years ago
6

A company is trying to estimate the cost of debt for a new project. For their estimate, they will find the yield to maturity on

existing company bonds. They have one outstanding bond issue at the moment that will mature in 15.00 years. The bond pays an annual coupon of 9.00%, with a face value of $1,000. The bond currently trades at 92.00% of face value. What is the yield to maturity on the existing debt
Business
1 answer:
Semmy [17]2 years ago
8 0

Answer:

Yield to maturity =9.9%

Explanation:

The yield to maturity is the return on debt expressed in percentage.  It can be used to worked as follows using the formula below

YTM =( C + F-P/n) ÷ ( 1/2× (F+P))

C- annual coupon,  

F- face value ,

P- current price,  

n- number of years to maturity

YM - Yield to maturity

C- 9%× 1000 =90 , P- 92×1000= 920,  F- 1000

AYM = 90 + (1000-920)/15 ÷ 1/2× (1000+920)

= 95.33 ÷ 960

Yield to maturity =9.9%

You might be interested in
a manufacturer of games sell each copy for 21.95.the manufacturing cost of each copy is 14.92. monthly fixed cost is 8500. durin
natali 33 [55]

The break-even point is calculated as -

Break-even point (in units) = Fixed cost ÷ Contribution margin per unit

Here,

Selling price = $ 21.95

Variable cost (manufacturing costs) = $ 14.92 (since, costs bifurcation is not given, the manufacturing costs are taken as variable costs)

Contribution per unit = Selling price - Variable cost (manufacturing costs)

Contribution per unit = $ 7.03

Fixed cost (monthly) = $ 8500

Now,

Break-even point (in units) = $ 8,500 ÷ $ 7.03

Break-even point (in units) = 1,209.1 or 1210 games

7 0
3 years ago
What is one strategy that can help a person avoid spending too much money
VARVARA [1.3K]

Answer:

Concept: Business

  1. Choosing a credit card with a low minimum monthly payment will lead to less spending
4 0
3 years ago
Read 2 more answers
________ is seen as a way to stimulate gains in economic efficiency by giving owners a powerful incentive—the reward of greater
Mama L [17]

Answer:

Group of choices:

A.  Globalization

B.  Economic transformation

C.  Deregulation

D.  Privatization

The correct answer is  D.  Privatization.

Explanation:

Privatization is an existing mechanism in the economy through which the government makes an industry or an activity no longer part of the public sphere, being transferred or transferred from the State to private companies or organizations.

The concept of privatization is often related to tools to improve competition, which help companies to improve their cost structure, allowing products to be of higher quality and at lower prices, favoring the consumer.

Since privatization reduces state participation in the economy, it is identified with capitalist policies. This tool is opposed to nationalization.

3 0
3 years ago
Einstein Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be
sveta [45]

Answer:

$29,000

Explanation:

Calculation would be as follows:

Particular                                   Amount ($)

Beginning Cash                          10,000

Add: Cash Receipt                      85,000

Less: Cash Disbursement          (66,000)

Cash Available                            29,000

Hence, the cash available over disbursement for the month would be $29,000.

3 0
3 years ago
The Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable rate of r
Afina-wow [57]

The residual income for the Division A of Magnolia Company for an income from operations of $80,000 will be $32,000.

<h3>What is residual income?</h3>

Residual Income is the total of total income from operations less the minimum acceptable rate of return on the deployed assets for such operations over a financial period.

Using the above information, it can be ascertained that the residual income will be,

\rm Residual\ Income = Income\ from\ Operations - Rate\ of\ Return\ x\ Assets\\\rm Residual\ Income = 80000- (12\%\ x\ 400000)\\\\\rm Residual\ Income = \$32,000

Hence, the residual income will be as computed above.

Learn more about residual income here:

brainly.com/question/27330050

#SPJ1

8 0
2 years ago
Other questions:
  • Troy starts a job right out of college. He feels lucky to have found a position in the financial industry. Troy knows that he ne
    15·1 answer
  • All of the following developments helped make the cattle business profitable except:
    7·1 answer
  • You are considering 2 investment alternatives. The first is a stock that pays quarterly dividends of $0.25 per share and is trad
    12·1 answer
  • Suppose a study shows that the demand for old navy jeans old navy jeans is more elastic than the demand for all jeans jeans. wha
    14·1 answer
  • Yoko is trying to explain to one of her ticket counter associates the differences in price associated with concert tickets. She
    5·1 answer
  • Another way that malicious code can threaten businesses is by using mass bulk e-mail (spam), spyware, persistence cookies, and t
    15·1 answer
  • PB4.
    11·1 answer
  • Many business application software vendors are pushing the use of _____ for small and medium-sized enterprise (SME) to help cust
    15·1 answer
  • One good story leads to the larger picture, or the reverse. This is an example of structuring your speech by _____. Group of ans
    11·1 answer
  • magine that the current owner of the land in the previous exercise was willing to sell the land for $2 million. Assuming this am
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!