Question text
Computing Issue Price for Zero-Coupon Bonds
Baiman, Inc. Issues $1,000,000 of zero-coupon bonds that mature in 10 years. Compute the bond issue price assuming that the bonds' market rate is:
a. 10% per year compounded semiannually.
Round your answers to the nearest dollar.
Present value of principal repayment
Answer
b. 12% per year compounded semiannually.
Round your answers to the nearest dollar.
Present value of principal repayment
Answer
c. If prior to the debt issue at 12%, the firm had total assets of $3. 5 million and total equity of $1 million, what would be the effect of the new borrowing on the financial leverage of the firm?
(Round your answers to two decimal places. )
Financial leverage prior to borrowing
Answer
Financial leverage subsequent to borrowing
Increase (Decrease) in financial leverage
Financial leverage prior to borrowing
Financial leverage subsequent to borrowing
I
Answers
The zero-coupon bond rate based on the information provided, after calculation is $376,889.48
Face value: $1 million
Mature = 10 * 2 = 20 semesters.
Market price = 0.1/2 = 0.05
We must apply the following calculation to get the bond's price:
Bond with no coupons equals [face value/(1+i)]
Bond with no coupon equals [1,000,000 / (1.0520)]
$376,889.48 for a zero-cupon bond
b: Market price = 0.12/2 = 0.06
We must apply the following calculation to get the bond's price:
Bond with no coupons equals [face value/(1+i)]
Bond with no coupon equals [1,000,000 / (1.0620)]
Bond with no coupon = $311,804.72
c Financial Leverage: Equity/Total Assets
If the ratio is large, the corporation has financed the majority of its assets with borrowed money. A ratio of less than 2 indicates that equity is larger in proportion to liabilities and debt than debt capital and, conversely, a ratio of greater than 2 indicates that debt capital and liabilities are greater than equity.
Before issuing debt, total assets were $3.5 million.
Total equity was $1,000,000.
FL: $3,500,000 / $1,000,000 = $3,500,000
Debt capital: $3.5 million less $1 million is $2.5 million.
After the debt issuance, the total value of the assets will be $3.51 million (approximately) plus $0.311805 million.
Debt capital equals: $2.5 million plus $0.311805 million, or approximately $2.8 million.
Equity will stay at $1 million.
FL as of now is: $3.81 million / $1 million =3.811
As a result, Financial Leverage will grow by (3.81-3.5) = 0.31.
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Related Questions
Completing a(n ____ will help you identify things you are interested in
- aptitude test
- interest inventory
- personality survey
- skills assessment
Answers
Completing a interest inventory will help you identify things you are interested in. Therefore the correct option is option B.
Interest inventories are evaluations or examinations that assist people in identifying their passions, interests, and preferences. These usually take the form of a series of questions or statements that request respondents to rate their level of interest in various pursuits or subjects. An interest inventory's findings can guide people in choosing careers, pastimes, or educational paths that fit with their passions and interests.
An individual's capacity to learn or do a certain activity is measured by an aptitude test, whereas their characteristics, actions, and attitudes are evaluated by a personality survey. An evaluation of a person's skills or knowledge identifies their level of competence. Therefore the correct option is option B.
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A firm issued $15 million in preferred stock at a price of $3.25 per share. The preferred shares carry a 13% dividend, or $0.43 annually. After paying fees and costs, the firm realizes $2.89 per share issued. What is the cost of capital for this issuance of preferred stock?
Answers
Answer:
14.8%
Explanation:
Cost of capital for preferred stock can be calculated by a simple formula
Formula: Cost of preferred capital = dividend/(Current price - floatation cost)
As you can see in the question data current price - floatation cost and dividend is already given as $2.89 and $0.43 respectively. We just need to put values in formula.
Cost of preferred capital = $0.43/$2.89 x 100
Cost of preferred capital = 14.8%
For tax-reporting purposes, qualified dividends are considered to be what type of income? A) Phantom. B) Passive. C) Portfolio. D) Earned
Answers
For tax-reporting purposes, qualified dividends are considered to be (c) portfolio income.
Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits. The tax treatment of dividends depends on whether they are classified as qualified or nonqualified.
Qualified dividends are dividends that meet certain requirements set by the Internal Revenue Service (IRS). In general, to be considered qualified, dividends must be paid by a U.S. corporation or a qualified foreign corporation, and the shareholder must have held the stock for a certain period of time (usually at least 60 days for common stock, or 90 days for preferred stock).
Qualified dividends are taxed at the same rate as long-term capital gains, which is generally lower than the tax rate for ordinary income. This makes them a particularly attractive form of income for investors.
Portfolio income is income generated from investments, such as dividends, interest, and capital gains. This is in contrast to earned income, which is income from wages, salaries, and self-employment. Passive income, on the other hand, generally refers to income that is earned without active involvement, such as rental income or royalties.
In summary, for tax-reporting purposes, qualified dividends are considered to be portfolio income, which is income generated from investments such as dividends, interest, and capital gains.
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All of the following are principles of scrum development except _______.
O working closely with the customers
O testing the project once during development
O welcoming a change in requirements
O designing as you go
O frequently delivering a working version of the product
Answers
All of the aforementioned are principles of scrum development except: B. testing the project once during development.
What are the software development models?In Computer technology, some examples of the models and methodologies that are typically used in the software development life cycle (SDLC) include the following;
Spiral modelBig bang model.V-shaped model.Waterfall modelIncremental modelAgile model.What is Agile software development?In Agile software development, the software development team are generally more focused on the production of functional and active software programs with less effort on documentation, while ensuring that adjustments can be made when necessary.
Additionally, scrum development is an Agile software development methodology that is typically used for developing software based on an iterative, continuous testing, and incremental processes, which makes it adaptable and fast.
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2x2+2x2
8
16
14
18
HELP ME PLS
Answers
\((2 \times 2) + (2 \times 2) \\ \\ = 4 + 4 \\ \\ = 8\)
Option A (8) is correct -,-
Apne ko brainliest mangta vro -,- xD
Answer:
8
Explanation:
What does the term basic mean as used advertisement ?
Answers
In advertising, the term "basic" typically refers to a product or service that provides essential or fundamental features, without any additional or advanced features or characteristics.
When a product or service is described as "basic" in advertising, it means that it offers the core functionalities or benefits without any extra frills or enhancements. The term is often used to indicate simplicity, affordability, and ease of use. Basic products are designed to meet the basic needs of consumers without unnecessary complexity or additional features that may drive up the cost.
For example, a basic smartphone may offer essential functions such as calling, texting, and internet browsing, but it may lack advanced features like high-end camera capabilities or facial recognition. Similarly, a basic car may provide standard safety features and reliable performance but may not have luxurious amenities or cutting-edge technology.
Using the term "basic" in advertising helps set consumer expectations and communicate that the product or service is straightforward, practical, and suitable for individuals who prioritize simplicity and functionality over extravagant features. It can appeal to budget-conscious consumers or those seeking a no-frills option that fulfills their basic requirements.
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What are some benefits of working together in a team? (Take your time)
Answers
3.Blends Complementary Strengths.
4.Builds Trust.
5.Teaches Conflict Resolution Skills.
6Promotes a Wider Sense of Ownership.
7.Encourages Healthy Risk-Taking.
8. Increases Innovation.
9 Engages Employees.
10. Enhances Flexibility.
11. Overcomes Obstacles. ...
12. Improves Service levels. ...
13.Gain Fresh Perspectives.
Tyler, a self-employed taxpayer, travels from Denver to Miami primarily on business. He spends five days conducting business and two days sightseeing. His expenses are $400 (airfare), $150 per day (meals at local restaurants), and $300 per night (lodging). If required, round your answers to the nearest dollar. What are Tyler's deductible expenses in the below year: 2023 $fill in the blank 1 2022 $fill in the blank 2
Answers
The deductible expenses for Tyler in these years are:
2023 = $22752022 = $2650How to solve for the deductible expensesAir fare = 400 dollars
Lodging = 300 x 5
meals = 150 x 5 x 50%
Total in 2023 = 400 + 1500 + 375
= $2275
The deductible for 2022400 + 5x150 + 5x300
= $2650
Hence the total deductible in 2023 = $2275
and in 2022 = $2650
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Support Material
Business functions
Activity 1:
Study the following scenarios and answer the questions that flow:
1.1 The sales department is constantly running out of stock because stocks are not ordered on time. The admin clerk is new and files the documents in the wrong place. The purchasing department was not even aware that they should order more stock.
1.1.1 Which department created the problem?
1.1.2 What will the consequences be if the sales department constantly runs out of stock?
1.1.3 How can the problem be solved?
1.2 The creditors are not paid on time and added interest to the account of the business.
1.2.1 Which department created the problem?
1.2.2 What will be the consequences if this continues to happen?
1.3 The workers are always complaining of the third grade stock they have to sell to customers.
1.3.1 Which department created the problem?
1.3.2 How can the problem be solved?
1.4 Clients are constantly surprised on the new items they get on the shelves and some of which they have not seen before?
1.4.1 Which department created the problem?
1.4.2 How can this problem be prevented in future?
Answers
In the scenario given, the department that was said to have created the problem is the admin department because the document to show that there was low stocks was filled in the wrong place and as such, the purchasing department was not made aware.
1.1. What will the consequences be if the sales department constantly runs out of stock?The consequences are:
They will have issues with customers demanding product and unfulfilled orders.Complains and lastly they will lose customers.How can the problem be solved?There should be a computerized system on all product and their quantities should be included such that when the product is getting low on stock, the system will alert the admin and appropriate steps to new buy product will be taken
1.2. Which department created the problem?Since the creditors were not paid on time, the department that created the problem is also the admin department
What will be the consequences if this continues to happen?They we be close done.They will not have anyone who will sell products to them.1.3.Which department created the problem?The purchasing department created this problem.
How can the problem be solved?The purchasing department need to buy quality Stocks. They can hire a professional who knows the quality so that he or she can help with the purchase.
1.4.
Which department created the problem?The sales department created this problem
How can this problem be prevented in future? The sales department need to use a method that will not surprise the people such that they can be create an ad or place the new product one at a time not all new product at the same time.
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Mike relocated for work and learned that the region in which he planned to buy a home had many old underground mines. In fact, Mike might even need to purchase mine subsidence insurance. What might a home inspector flag for Mike if there are any concerns about undermining
Answers
The issue that a home inspector will flag for Mike, given the concerns about a undermining, is the formation of a sinkhole on the property
The reason for the presence of a sinkhole on the property being raised by the home inspector is as follows;
The location Mike intended to buy a home is one with several underground mines, such that Mike could need mine subsidence insurance
A home inspection is an aid that helps a person intending to but a house make more informed decisions about the home under consideration
The function of an home inspector includes the identification of the issues that could possibly arise and the maintenance to be expected on the property, and therefore, the risks and opportunity in the purchase
Among the potential risk that will raised by a home inspector on the property with underground mines include the possibility of a sinkhole on the property
A sinkhole is a surface depression that results due to dissolution of near surface rocks by water draining into cavities under the soil surface, thereby eroding the rock such limestone, underneath, that develops in a manner which is not readily obvious or predictable
Sinkhole are not covered by most homeowner's insurance policy, making the property a money pit
Therefore, the home inspector might flag the likelihood of a sinkhole on the property
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Is an allocation of the cost of buildings, vehicles, and equipment to expense over time as they are used.
Answers
Depreciation is an allocation of the cost of buildings, vehicles, and equipment to expense over time as they are used.
The basic journal entry for depreciation is to debit the Depreciation Expense account (which appears in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the number of fixed assets).
The purpose of depreciation is to represent an accurate value of assets on the books. Every year, as assets are used, their values are reduced on the balance sheet and expensed on the income statement.
Straight-line depreciation is the simplest method for calculating depreciation over time. Under this method, the same amount of depreciation is deducted from the value of an asset for every year of its useful life.
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How do you determine fixed and flexible expenses ??? Pls helppp
Answers
Answer:
Fixed expenses generally cost the same amount each month (such as rent, mortgage payments, or car payments), while variable expenses change from month to month (dining out, medical expenses, groceries, or anything you buy from a store
What are the two types of INCOME taxes taken out of your paycheck?
A) State and Federal
B) Social Security and Local
Answers
What are the 5 Functions of Management? Describe each Function:
Answers
involves analyzing information, setting goals, and making decisions about what needs to be done
organizing-
identifying and arranging the work and resources needed to achieve goals
staffing-
all activities involved in obtaining, preparing and compensating the employees of a business
implementing-
the effort to direct, and lead people to accomplish h planned work of an organization
controlling-
determines to what extent the business s accompishing the goals it set out to reach
A law firm is an example of a
Corporation
Conglomerate
Partnership
Sole Proprietorship
Answers
Answer:
The answer to this question is the first option, Corporation.
A bookstore will only order books that come in complete cases. Each case has 150 books and costs $1,757 quantity a = the number of books that can be ordered for $10,550 quantity b = the number of books that can be ordered for $12,290.
Answers
The quantity of books for available money of $10,550 and $12,290 are the same. The correct option is: The two quantities are equal (option C)
The problem can be solved using unitary method.
Using this method, the required value is multiply the quantity by the unit cost.
In the given problem:
The bookstore will only buy books in complete cases.
Each case consists of 150 books and it costs $1,757.
Scenario A; Available money = $10,550
6 cases will cost: 6 x $1,757 = $10,542
Hence, with this available money the bookstore will get 6 cases of books, which equal to 6 x 150 = 900 books.
Scenario B; Available money = $12,290
6 cases will cost: 6 x $1,757 = $10,542
7 cases will cost 7 x $1,757 = $12,299
Hence, with available money of $12,290, the bookstore will get 6 cases of books, the money is not enough to buy 7 cases.
The quantity = 6 x 150 = 900 books.
Therefore, the correct choice is:
The two quantities are equal (option C)
Your question is incomplete, but most probably your question was:
A bookstore will only order books that come in complete cases. Each case has 150 books and costs $1,757
Quantity A
The number of books that can be ordered for $10,550
Quantity B
The number of books that can be ordered for $12,290
A. Quantity A is greater.
B. Quantity B is greater
C. The two quantities are equal.
D. The relationship cannot be determined from the information given.
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a retailer acquires merchandise for resale. how would this be recorded in a perpetual inventory system?
Answers
Hope this helps!
How can Indigenous communities build on and leverage their strengths through partnership? Answer questions based on Indigenous workshop.
Answers
Indigenous communities can build on and leverage their strengths through partnerships by fostering collaboration, honoring traditional knowledge, promoting self-determination, and creating mutually beneficial relationships.
Fostering Collaboration: Indigenous communities can engage in partnerships by collaborating with external organizations, governments, and stakeholders. By working together, they can pool resources, expertise, and perspectives to address community needs and achieve common goals. Collaborative partnerships enable sharing of knowledge, experiences, and best practices, leading to more effective and sustainable outcomes.
Honoring Traditional Knowledge: Indigenous communities possess valuable traditional knowledge systems that have sustained them for generations. By incorporating traditional knowledge into partnerships, they can contribute unique perspectives, solutions, and approaches to address challenges and foster community resilience. This not only preserves cultural heritage but also enhances the effectiveness and relevance of initiatives undertaken in partnership.
Promoting Self-Determination: Indigenous communities should lead the decision-making and planning processes in partnerships to ensure self-determination. By actively participating in and guiding partnerships, they can assert their sovereignty, values, and aspirations. This empowerment allows for greater control over the direction, outcomes, and benefits of collaborative efforts, promoting community well-being and cultural preservation.
Creating Mutually Beneficial Relationships: Successful partnerships are built on mutual respect, trust, and shared benefits. Indigenous communities can seek partnerships that acknowledge and respect their rights, culture, and land. By establishing equitable relationships, communities can secure resources, funding, and support that amplify their strengths, address disparities, and promote sustainable development. Such partnerships should foster long-term commitments, transparency, and accountability.
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what is meant by recession
Answers
Answer:
Spatial recession in paintings is the relationship between objects which appear to lie near to the observer and those which seem further away, and thus recede into space. ...
Explanation:
PLEASE HELP QUICKLY: (FIRST ANSWER GETS BRAINLIEST)
Alex bought a new television at Christmas. Now that same television costs $200 less than her purchase price. What does this example BEST demonstrate?
A. income risk
B. interest rate risk
C. inflation risk
Answers
Answer: С. inflation risk
Explanation:
You're welcome :)
Alex received a new television for Christmas. This is best described as inflation risk because the same television now costs $200 less than her purchase price. Option C is correct.
What is inflation risk?Inflationary risk is defined as the risk that inflation will cut down the returns on an investment by trimming purchasing power. This is basically means that the value of money at present will reduce the amount of money in the upcoming time period.
The given scenario best explains that the value of television that was purchased in Christmas, will reduce after some time, denoted the example of inflation risk.
Therefore, option C is correct.
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short poem on professional
Answers
Answer:
professional When you walk into work you make a schedule It's not something to be ashamed of It's something to work hard on keep on moving in the game you'll make it so far You will live in a big house and maybe buy a car Whan I think everybody is special and if you think about it be we'll all be professional
Explanation:
Your best friend just purchased a new house and is planning to buy a homeowner’s insurance policy. Based on what you learned in this section, which of the following does a typical policy not cover?
Answers
Answer:
flood coverage
Explanation:
i took the quiz and it was correct
⚠︎IF SOMEONE SHARES A LINK DO NOT GO TO IT! IT WILL DOWNLOAD A VIRUS!⚠︎
ok have a good day ❀
Answers
Answer:
tank us.
Explanation:
the principal of a mortgage loan is the
a. down payment minus the closing costs minus the purchase price
b. purchase price plus the closing costs minus the down payment
c. down payment plus the closing costs plus the down payment
d. purchase price minus the closing costs minus the down payment
Answers
The down payment less the closing charges less the purchase price is the mortgage loan's principle.
What does a mortgage look like in its simplest form?When you enter into a mortgage with a lender, you give the lender the right to seize the property if they are unable to make the loan amount back plus the interest. You might be able to get a mortgage loan that will enable you buy a new house using the worth of the an existing home as security.
Why do individuals use mortgages?Mortgage loans assist people in financing the purchase of real estate by taking a small portion of the property's overall worth as payment. How Do Mortgages Work A mortgage is a loan used to pay for the upkeep of a home, piece of land, or other kinds of rental properties.
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The projects are equally risky, and their WACC is 10%. What is the MIRR of the project that maximizes shareholder value
Answers
The Modified Internal Rate of Return (MIRR) is a capital budgeting technique that takes into account both the cost of funds (WACC) and the reinvestment rate of cash flows.
To calculate the MIRR of a project that maximizes shareholder value, we need to compare the MIRR of each project and select the one with the highest value. Without specific cash flows for the projects, The projects are equally risky, and their WACC is 10%we cannot calculate the MIRR. Therefore, we need more information to determine which project will maximize shareholder value based on their MIRR.
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Noriko analyzes ways to create and improve computer systems.
Boris helps people who are having difficulty using computers.
Lane writes code for operating systems.
Jewel tests software to identify problems.
Carla fixes and maintains databases.
Ignacio plans, organizes, and oversees information technology projects.
Answers
Answer:Brian uses ultrasound technology to create images of a patient’s liver and kidneys.
Nigel performs tests on a patient to get information about how his heart is working.
Krystal analyzes X-rays to determine whether a patient has a broken arm.
Explanation:
Answer:
A. B. F.
Explanation:
Edge
harmony is currently producing 100 units of a necessary component part by incurring $60,000 in direct materials, $12,500 in direct labor, $22,500 in variable overhead, and $15,000 in fixed overhead. if harmony purchases the component externally, $10,000 of fixed costs can be avoided. what is the external price for 100 units at which the company is indifferent between buying and selling? select answer from the options below $110,000 $105,000 $100,000 $95,000
Answers
The maximum price to pay is= $1,045 i.e. Company is indifferent between buying and selling.
Harmony is currently spending $60,000 on direct materials, $12,500 on direct labor, $22,500 on variable overhead, and $15,000 on fixed overhead to produce 100 units of a necessary part. External purchases of the component by Harmony could save the company $10,000 in fixed costs.
Unitary cost\(= (60,000 + 12,000 + 22,500 + 10,000)/100= $1,045\)
The maximum price to pay is indifferent between buying and selling= $1,045
Harmony's maximum willingness to pay the outside vendor for these 100 component parts is $100,000. Harmony wouldn't benefit from the amount of fixed costs eliminated if they paid more.
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can u guys give me 3 current trends in marketing research
Answers
Answer:
The latest marketing trends for 2022 include personalization, social media, artificial intelligence (AI) and virtual reality (VR), and the metaverse. However, a good marketing foundation remains important.
can someone tell me what car u like bc i need inspo, like a V6 or something
Answers
Answer:
My personal favs are the Ford GT 2017, the Lamborghini Veneno, the Aston Martin Vulcan, and the Koenigsegg Jesko.
With the help of online research, write a short report on “glocalization.”
Answers
The phenomena of Glocalization, which is best described as Thinking Globally, Acting Locally, is created when the two terms of globalisation and localization are combined.
To put it more properly, we may say that although if a single brand is produced, sold, and distributed globally, it is nevertheless personalised and customised to suit the tastes and preferences of customers in the many global marketplaces.
It is carried out since each region of the world has its own unique culture, linguistic preferences, demands, and desires.
By adjusting their offerings and products to meet the needs of that specific market, businesses may effectively position and place their items, resulting in high revenues and devoted customers.
The following are all global brands, although they cater to the demands of their customers in various parts of the world while selling items.
Chips by Lays (They sell different flavours in different parts of the world, according to the taste preference and eating habits of that country).
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