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Nikolay
3 months ago
14

Grossnickle corporation issued 20-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000 one year ago. today,

the market interest rate on these bonds is 5.5%. what is the current price of the bonds, given that they now have 19 years to maturity?
Business
1 answer:
Katen [3.5K]3 months ago
5 0
Bond assessment:
<span>Face value = Maturity value = FV = $1,000 </span>
<span>Annual coupon rate = 7.5% </span>
<span>Remaining years to maturity = N = 19 </span>
<span>Required return = I/YR = 5.5% </span>
<span>(Coupon rate)(Face value) = PMT = $75 </span>
<span>Present value = $1,232.15</span>
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Seaside Developments Inc. has $200,000 of no par value 4% cumulative preferred shares, and 12,000 shares of no par value common
harina [3808]

Response: a. $18,000

Clarification:

Cumulative Preferred Shares are types of shares whereby the company consistently pays Preferred dividends and if it cannot do so in any given year, the unpaid amount accumulates until they can pay it later.

In the question posed, the dividends owed to Preferred Shares are calculated as follows:

= 4% * 200,000

= $8,000

In the first year, $8,000 was allocated for dividends.

= 8,000 - 8,000

= 0

This implies that there are no preferred dividends owed from Year 1.

In Year 2, $18,000 was declared for dividends,

= 18,000 - 8,000

= $8,000

This indicates that in Year 2, the company managed to fulfill its Preferred dividends and still had funds available to distribute to Common Shareholders.

In Year 3, $24,000 was dedicated to dividends.

= 24,000 - 8,000

= $16,000

Therefore, in year 3, the company had enough funds to cover its Preferred Dividend commitments, meaning it paid out all of the $8,000 due to the Preferred Shareholders.

6 0
1 month ago
David N. gets $3 per week as an allowance to spend any way he pleases. Because he likes only peanut butter and jelly sandwiches,
Nady [3600]

Response:

The answer to the question is provided below.

Analysis:

(a) What quantities of peanut butter and jelly will David purchase with his $3 weekly allowance?

It is stated that David prefers 2 ounces of peanut butter for each ounce of jelly, thus

2Pb = J, and the budget constraint can be expressed as 0.05Pb + 0.1J = 3.

Using substitution,

David will acquire Pb = 30 ounces, J = 15 ounces.

30(0.05) + 15(0.10) = 3

(b) If the cost of jelly rises to $0.15 per ounce, what quantities of each item would he purchase?

If pj = $0.15,

24(0.05) + 12(0.15) = 3

Using substitution, we find J = 12 ounces, Pb = 24 ounces.

4 0
2 months ago
p. 82) Which of the following is NOT a limitation of SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis? A. Organizatio
Nady [3600]

Answer:

The proper choice is option "B": SWOT's extensive and integrative focus on the external environment.

Explanation:

The SWOT analysis examines both internal and external factors that affect a company's functioning, offering opportunities to leverage strengths or manage risks. Here, internal factors refer to Strengths and Weaknesses, while external factors encompass the Opportunities and Threats faced by the business.

The broad and integrative approach of SWOT towards the external environment is a strength and not a weakness of this framework.

3 0
2 months ago
2. [5 pts] Consider the following events: Scientists reveal that eating oranges decreases the risk of diabetes, and at the same
Scilla [3833]

Response:

There will be an increase in equilibrium quantity, but the impact on equilibrium price remains uncertain.

Note:

Due to the scientists' discovery, demand for oranges will rise, as will the price.

Additionally, the introduction of new fertilizers will boost the supply of oranges, leading to a price decrease.

Taking both of these factors into account indicates that there will be a rise in equilibrium quantity, while the effect on equilibrium price cannot be determined.

8 0
3 months ago
Peter signed up for a program that cost $10.50 per month to stream movies to his computer. he decided to cancel his service afte
Scilla [3833]

Conclusion: Peter has a remaining amount of $1.25 after he covers the service expenses.

Reasoning:

The total cost for 5/6 of a month amounts to (5/6)*$10.5= 0.83333*$10.5

= $8.75

Thus, the difference between his initial funds and his expense for the service will result in his change.

Change = $10.5-$8.75

=$ 1.25.

I hope this response was helpful.

6 0
2 months ago
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