Answer:
Option D $8333
Explanation:
The value of the irredeemable bond can calculated using the Dividend Valuation Model.
The formula for the computation is:
Value of the Bond = Interest paid / rate of return on a similar bond
Value of the Bond = $500 / 6% = $8333.33
Note that initially the bond was worth $5000 which can be calculated with the same formula:
Value of the Bond = $500 / 10% = $5000
The net increase is $3333
So the correct answer is option D.
Answer:
how is your day going I am the cootie man how is your day going on in the Gucci mane how
Explanation:
dd
Answer: C - Jenny pays Abe $300 to give the dog to his parents who live on an isolated farm.
Explanation: Since the benefit of owning the dog is worth $200 to Abe and Jenny is willing to pay him $300 to send the dog to his parents who lives on an isolated farm. Abe stand to gain an extra $100 above his initial benefit of keeping the dog for $200.
Long-term bonds are preferable to hold if interest rates decrease because their price will rise more than the price of short-term bonds, providing a bigger return. Long-term bonds, however, are more susceptible to interest-rate risk. In addition, the longevity of the bonds, not only their term to maturity, is a major factor.
<h3>What are
short-term bonds?</h3>
Short-term bonds may offer consistent income with comparatively little risk. When compared to money markets, higher profits can be obtained. Even some bonds are tax-free.
The potential yield of a short-term bond is higher than that of money market investments. Bonds having shorter maturities are often more resistant to changes in interest rates than other types of assets. Purchasing a bond and keeping it until it matures entitles you to the stated principle and interest rates.
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The things that decision maker should consider in this situation is to <span>Increase the cost of capital used to evaluate the project to reflect its higher-than-average risk.
In budgetinng process, the decision maker need to make sure the cost that potentially incurred for the company because of the higher risk.
If, after including all that the potential benefit still outweight the potential risk, then they could move forward with the investment.</span>
