Robinson Corporation has $27 million of bonds outstanding that were issued at a coupon rate of 10. 950 percent seven years ago. Interest rates have fallen to 10. 250 percent. Mr. Brooks, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 17 years left to maturity, and Mr. Brooks would like to refund the bonds with a new issue of equal amount also having 17 years to maturity. The Robinson Corporation has a tax rate of 30 percent. The underwriting cost on the old issue was 2. 70 percent of the total bond value. The underwriting cost on the new issue will be 1. 80 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a 6 percent call premium starting in the sixth year and scheduled to decline by one- half percent each year thereafter. (Consider the bond to be seven years old for purposes of computing the premium. ) Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e. G. 4. 06 percent should be rounded up to 5 percent).
Answers
The cost of issuing new bonds is $27.05 million, which is greater than the market value of the old bonds of $54.75 million. Hence, it is not beneficial for Robinson Corporation to refund its outstanding bonds at this time.
To determine whether it is beneficial for Robinson Corporation to refund its outstanding bonds, we need to compare the cost of the old bonds to the cost of issuing new bonds.
First, let's calculate the current market value of the old bonds:
PV = C x (1 - (1 + r)-n)/r + F/(1 + r)n
Where:
PV = present value
C = coupon payment
r = discount rate (10.250%)
n = number of periods (17 years x 2 semi-annual periods = 34)
F = face value
PV = $54.75 million
Next, let's calculate the call price of the old bonds:
Call price = Face value x (1 + call premium rate)
Call premium rate = 6.0% + (7 - 6) x 0.5% = 6.5%
Call price = $27 million x (1 + 6.5%) = $28.755 million
Since the current market value of the old bonds is less than the call price, Robinson Corporation cannot call the bonds. Instead, it can only refund them by issuing new bonds.
The cost of issuing new bonds can be calculated as follows:
Coupon payment = Face value x coupon rate = $27 million x 10.950% = $2.955 million
Underwriting cost on old issue = $27 million x 2.70% = $0.729 million
Underwriting cost on new issue = $27 million x 1.80% = $0.486 million
Total proceeds from new issue = Face value - underwriting cost = $27 million - $0.486 million = $26.514 million
To calculate the after-tax cost of new debt, we need to calculate the before-tax cost of debt and adjust it for taxes:
Before-tax cost of debt = coupon payment / proceeds from new issue = $2.955 million / $26.514 million = 11.15%
After-tax cost of debt = before-tax cost of debt x (1 - tax rate) = 11.15% x (1 - 30%) = 7.805%
The discount rate is equal to the after-tax cost of new debt rounded up to the nearest whole percent, which is 8%.
Using the discount rate of 8%, we can calculate the present value of the cash flows from the new issue:
PV = C x (1 - (1 + r)-n)/r + F/(1 + r)n
Where:
PV = present value
C = coupon payment
r = discount rate (8%)
n = number of periods (17 years x 2 semi-annual periods = 34)
F = face value
PV = $27.05 million
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Related Questions
A speed boat bought for $13,000 depreciates at 10% per annum compounded continuously. What is its value after 7 years? Round the answer to nearest dollar.
Answers
Answer:
6,456
Explanation:
Substitute the given values into the formula: A=Pe^-rt, where A represents the future value and P represents the initial (current) value.
The amount of value after 7 years when the purchase value of the speed boat is $13,000 should be considered as the $6,456.
Calculation of the amount:Since the speed bought purchase value is $13,000
The depreciation rate is 10% per annum compounded continuously
The time period is 7 years
So here the amount should be
= $13,000 * e^-0.70
= $6,456
hence, The amount of value after 7 years should be considered as the $6,456.
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I NEED HELP PLS DONT RESPOND WITH A LINK
_______ used the terms Theory X and Theory Y to describe different attitudes managers had about employees.
Douglas McGregor
Victor Vroom
Elton Mayo
Robert Colby
Answers
Type the correct answer in the box. Spell all words correctly.
Which form of marketing do firms use when they market their products to all consumers alike, even when not all of them constitute the target audience?
When firms market their products to all consumers alike, even when not all of them constitute the target audience, they exhibit (___?___) marketing.
Answers
Answer:
Outbound Marketing is the correct answer
Explanation:
Answer:
outbound marketing - I just took the test this is correct
Explanation:
A course that costs $500 will allow you to get a job that pays $2 more per hour than your current job. How many hours will you need to work at the new job before your investment in education has "paid off"?
Answers
Answer:
250 hours.
Explanation:
Cost of course : $500
The extra income from the course is $2 per hour
to pay off the cost of the course requires earning $500 by working at a rate $2 per hour.
Number of hours required = $500/2
=250 hours.
When making decisions, managers often must decide between doing what is beneficial for the firm in the short term, and what is beneficial for both the firm and society in the long term. To address this conflict, a firm must
Answers
When making decisions, managers are often faced with a conflict between what is beneficial for the firm in the short-term and what is beneficial for both the firm and society in the long-term.
This conflict arises because the actions that benefit the firm in the short-term may not necessarily align with the interests of society as a whole, which can lead to negative consequences for both the company and society in the long-term.
To address this conflict, a firm must adopt a long-term orientation and consider the broader social and environmental impacts of its decisions. This means looking beyond immediate financial gains and recognizing that actions taken today can have far-reaching implications for the company's reputation, customer loyalty, employee morale, and overall sustainability.
Firms that prioritize social responsibility and sustainable business practices are more likely to build strong relationships with stakeholders, including customers, employees, investors, and regulators. They are also better equipped to weather economic downturns and other disruptions, as they have diversified their risk and invested in building resilient supply chains and communities.
Ultimately, the key to addressing the conflict between short-term gains and long-term benefits is a commitment to corporate social responsibility (CSR) and sustainable business practices. By prioritizing the needs of society and the environment alongside those of shareholders, firms can create value for all stakeholders over the long-term, ensuring their continued success and impact.
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all states except _____ have adopted some version of article 2 (sales) of the ucc.
Answers
All states except Louisiana have adopted some version of Article 2 (Sales) of the UCC. This article provides a set of rules that govern commercial transactions involving the sale of goods. The purpose of the article is to provide clarity and uniformity in the buying and selling of goods, particularly in cases where the parties have not entered into a specific contract.
Under Article 2, buyers and sellers are obligated to act in good faith and adhere to the reasonable expectations of the other party. The article also sets forth rules on the formation of contracts, the delivery of goods, and the rights and obligations of buyers and sellers in the event of a breach of contract.
The adoption of Article 2 by the majority of states has helped to create consistency in commercial transactions and has made it easier for businesses to engage in interstate commerce. However, differences do exist between the various states' versions of the article, particularly with regards to the statute of frauds and the treatment of warranties, so it is important for businesses to be aware of the specific rules that apply in each state.
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Which situation describes a monopoly market structure?
A. Many different vendors sell the same few T-shirt designs to fans at
a concert.
B. Solar panels are only available from two companies operating in a
country
C. A lot of new Chinese restaurants open in an area with a growing
Chinese population
D. One company builds and sells all of the cars available in a
developing country.
Answers
Answer:
D. One company builds and sells all of the cars available in a
developing country. That if so gives the one company a monopoly, because there is only one company supplying that service.
Which of the following is the term for a special tax placed on foreign goods sold in
the United States?
A. Tea tax
B. Tariffs
C. Excise tax
D. Customs
Answers
Anticipatory breach a occurs when a party to a contract has signaled to the other he will not be performing b relieves the other party from his performance c a and b d none of the above
Answers
An anticipatory breach is a major breach of contract between two parties. It happens when one party tells the other that they will not be able to fulfill their contractual duties. Thus, option A is correct response.
This means that a party to a contract has indicated to the other party that they will not be able to do what they agreed to do. This could be because of various reasons such as financial difficulties, unexpected events, or finding a better deal elsewhere. When this occurs, the other party to the contract is freed from their obligation to do their part. They may be able to claim damages or other remedies if they can show that they have lost something because of the breach.
Hence, option A is the right answer.
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Which of the following federal government agencies has responsibility for regulating the various stock exchanges in the U.S.?
Answers
The Securities and Exchange Commission (SEC) has responsibility for regulating the various stock exchanges in the U.S.
The SEC is an independent federal government agency that is responsible for protecting investors, maintaining fair and orderly markets, and facilitating capital formation. The SEC oversees and regulates securities markets, including the major stock exchanges such as the New York Stock Exchange (NYSE) and the Nasdaq Stock Market, as well as brokerage firms, investment advisors, and other market participants. The SEC also enforces federal securities laws and prosecutes securities fraud and other violations. Overall, the SEC plays a critical role in business maintaining the integrity and stability of U.S. financial markets. Stock exchanges are marketplaces where publicly traded companies' stocks and other securities are bought and sold. They provide a platform for investors to buy and sell stocks, which helps companies raise capital and provides investors with opportunities to invest in the growth of these companies.
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there is no right or wrong answer
Answers
A business makes products that involve many different departments in their
production. What type of cost accounting system is best for this purpose?
A. Process costing
B. Activity-based costing
C. Job order costing
D. Product costing
Answers
a. In 2015 , Bilal had a monthly salary of $4,166.5. Assume 2015 is the base year. In 2018 , the CPI went up to 106.3. His monthly salary in 2018 was $4,800. Did the purchasing power of Bilal go up? Please show calculations and explain your answers (2) b. In 2008 , there was a major housing mortgage crisis in the U.S. economy which eventually led to recession. At that time, there was a GDP Gap or loss of 10.75%. The natural rate of unemployment in 2008 was 5.1%. What was the unemployment rate in 2008 in the U.S.? c. Germany's current inflation rate of 1.8% and France"s current inflation rate is 1.3%. Using the rule of 70 , which country will first experience doubling of prices of goods and services? \$how calculations
Answers
In this case, the base year is 2015, so we'll use the salary in 2015 ($4,166.5) and the CPI in 2018 (106.3) to calculate the adjusted salary in 2018.The formula is:Adjusted Salary in 2018 = $4,166.5 * 106.3 / 100 = $4,423.05
Comparing the adjusted salary in 2018 ($4,423.05) with Bilal's actual salary in 2018 ($4,800), we can see that his salary increased more than the adjustment for inflation. Therefore, the purchasing power of Bilal increased between 2015 and 2018.
b. The GDP Gap represents the difference between the actual Gross Domestic Product (GDP) and the potential GDP. In 2008, there was a GDP Gap or loss of 10.75%, which means the actual GDP was 10.75% lower than the potential GDP. The natural rate of unemployment, also known as the Non-Accelerating Inflation Rate of Unemployment (NAIRU), represents the unemployment rate at which inflation remains stable. In 2008, the natural rate of unemployment was 5.1%.
To calculate the unemployment rate in 2008, we need to add the GDP Gap to the natural rate of unemployment:
Unemployment Rate = Natural Rate of Unemployment + GDP Gap
Unemployment Rate = 5.1% + 10.75%
Unemployment Rate = 15.85%
Therefore, the unemployment rate in the U.S. in 2008 was approximately 15.85%.
c. To determine which country will first experience a doubling of prices of goods and services using the rule of 70, we divide the number 70 by the inflation rate to calculate the approximate number of years it will take for prices to double.
For Germany, with an inflation rate of 1.8%:
Approximate number of years = 70 / 1.8 = 38.89 years
For France, with an inflation rate of 1.3%:
Approximate number of years = 70 / 1.3 = 53.85 years
Comparing the two, Germany will experience a doubling of prices of goods and services sooner than France, as it will take approximately 38.89 years for prices to double in Germany, while it will take approximately 53.85 years for prices to double in France.
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factorise the following3x^2-18 +24
Answers
Answer:
it's 3(x^2-2) bcoz -18-24= -6 and 3 is divisible into 6 twice
explain the three components of credibility: competence, caring, and character. How do they interrelate?
Answers
Imagine a triangle with a measure of character, skill, or compassion on each side. Each side adds to the credibility of the other.
Competence is related to your skill set and practical knowledge when it comes to finishing activities on the job and carrying out work-related responsibilities. By demonstrating your abilities, you'll become more trustworthy, and your superiors and coworkers will be able to count on you to do the tasks that have been given to you.
Caring is your commitment to the success of both the working community you are a part of and each of its individual members. It is important to act in everyone's best interests and show that you are accountable to other people. Having empathy for the worries and well-being of the business and your coworkers fosters close relationships.
Your moral standing and good reputation with the individuals you work with are represented by your character. Integrity is established by adhering to high standards of personal, organizational, and business values. One of the best ways to foster trust in the workplace, especially in the current context, is to act with integrity.
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The present value of a(n) of C dollars per period for t periods when the rate of return or interest rate, r, is given by ______.
Answers
The present value of a(n) of C dollars per period for t periods when the rate of return or interest rate, r, is given by: annuity.
In economics and finance, present value (PV), also known as present value, is the value of an expected income stream determined at the date of valuation. Present value is usually lower than future value.
Because money can earn interest except in times of zero or negative interest rates, when the present value is greater than or equal to the future value. This is known/called as the time value of money.
The value of your time can be explained with these simple sentences:
"A dollar today is worth more than a dollar tomorrow." "Worth more" here means that its value is greater than it will be tomorrow.
Interest can be compared to rent. Much like a renter pays rent to a landlord without transferring ownership of an asset, a borrower pays interest to a lender given access to the money for a period of time before repayment.
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Complete question:
The present value of a(n) of C dollars per period for t periods when the rate of return or interest rate, r, is given by:
C × (1 − [1/(1 + r)t]r/)
John works for a hospital. He is 30 years old and is planning on saving much of his salary for his retirement. What type
of retirement plan would you encourage John to get? Why? Use complete sentences.
Answers
I would encourage John to explore the possibility of setting up a 401(k) retirement plan. This type of retirement plan allows employees to contribute pre-tax money to an employer-sponsored account, and the employer may even match a portion of the employee's contribution.
What is a retirement plan?
A retirement plan is a financial arrangement designed to provide a stream of income to an individual after they leave their job. Retirement plans can include contributions from employers, employees, government, or other sources. There are many types of retirement plans, including 401(k) plans, IRAs, and pensions. Generally, these plans allow participants to save and invest money for retirement, while providing tax benefits. The money in these plans typically grows tax-free until it is withdrawn, at which point any income or capital gains are taxed. Retirement plans are important as they provide a way for individuals to save for their future, while also providing income security in retirement.
So, I would encourage John to explore the possibility of setting up a 401(k) retirement plan.
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Do you think large multinational corporations in general like Wal-Mart, Apple, McDonalds and Frito Lay are good or bad for the world? Is "globalization" another word for “Americanization”? Why or why not? (3 points) Explain using complete sentences.
Answers
Answer:
The use of any trademark in this text does not vest in the author or publisher any trademark ... Part 1: Management Practice 110 A Manager's Dilemma 110 Global Sense 110 ... Retaining Competent, High-Performing Employees 462 Employee ... as you can see, managers can and do have an impact—positive and negative.
shows the amount of savings and borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market
Answers
Answer:
7% and 135
Explanation:
The computation of the equilibrium interest rate and the quantity is shown below:
As we can see in the attached figure that at the interest rate of 7% the Qd is equivalent to Qs i.e 140
And when it the interest rate is 8% the quantity of lending is 145 and the quantity of borrowing is 135 that decreased the quantity of lending by 140 to 135 so we considered the 135
Levels of agriculture?
Answers
Answer:
Helloooo
the steps are :-
Soil preparationmanuringirrigationweedingharvestingstoringExplanation:
thanks hope it helps
Blossom Company is considering an investment that will return a lump sum of $850,000 3 years from now. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount should Blossom Company pay for this investment to earn an 6% return? (Round answer to 2 decimal places, e.g. 25.25.)
Answers
Ale jak się okazało w Polsce dniu narty nie skierowane to dniu tym świecie i jest ogóle nie ma problemu z tym że nie ma przecieku co w wszystko jutrzejszym terminie
JC recently graduated from veterinary school and opened her own professional practice. Assume JC does not qualify for the QBI deduction. This year, her net profit was $32,000.
Required:
a. Compute JC 's after-tax income from her practice assuming her self-employment tax is $4,522, and her marginal income tax rate is 22 percent.
b. What percentage of the federal tax burden on JC's business income is represented by the self-employment tax?
Answers
A. JC's after-tax income from her practice is $20,438. B. The self-employment tax represents approximately 39.09% of the federal tax burden on JC's business income.
a. To compute JC's after-tax income from her practice, we need to calculate her income tax and subtract it from her net profit.
Calculate the income tax:
Net profit = $32,000
Marginal income tax rate = 22%
Income tax = Net profit * Marginal income tax rate = $32,000 * 0.22 = $7,040
Calculate the after-tax income:
Self-employment tax = $4,522
After-tax income = Net profit - Income tax - Self-employment tax = $32,000 - $7,040 - $4,522 = $20,438
Therefore, JC's after-tax income from her practice is $20,438.
b. To determine the percentage of the federal tax burden represented by the self-employment tax, we need to calculate the ratio of self-employment tax to the total federal tax burden.
Calculate the total federal tax burden:
Total federal tax burden = Income tax + Self-employment tax = $7,040 + $4,522 = $11,562
Calculate the percentage represented by the self-employment tax:
Percentage = (Self-employment tax / Total federal tax burden) * 100%
Percentage = ($4,522 / $11,562) * 100% = 39.09%
Therefore, the self-employment tax represents approximately 39.09% of the federal tax burden on JC's business income.
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Can someone please help me with this!!!!
Answers
Answer:
Eh easy aall you have to do is pay 4,305 dolllars
Explanation:
Almendarez Corporation is considering the purchase of a machine that would cost $190,000 and would last for 10 years. At the end of 10 years, the machine would have a salvage value of $16,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $32,000. The company requires a minimum pretax return of 13% on all investment projects. (lgnore income taxes.) Click here to view Exhibit 12B-1 and Exhibi:128-2, to determine the appropriate discount factoris) using the tables provided. The net present value of the proposed project is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar: amount.) Mustiple Choice $(5)648) 120,568 $30000 5(20,995)
Answers
To calculate the net present value (NPV) of the proposed project, we need to determine the present value of the cost savings and salvage value, and subtract the initial cost of the machine.
Present value of cost savings:
The machine will provide annual cost savings of $32,000 for 10 years. We need to calculate the present value of an ordinary annuity using the discount factor for 13% and 10 years from Exhibit 12B-1. The discount factor for 13% and 10 years is 4.866. Therefore, the present value of the cost savings is $32,000 * 4.866 = $155,712.
Present value of salvage value:
The salvage value of $16,000 occurs at the end of 10 years. We need to calculate the present value of a single amount using the discount factor for 13% and 10 years from Exhibit 12B-1. The discount factor for 13% and 10 years is 0.302. Therefore, the present value of the salvage value is $16,000 * 0.302 = $4,832.
Net present value:
The initial cost of the machine is $190,000.
NPV = Present value of cost savings + Present value of salvage value - Initial cost
NPV = $155,712 + $4,832 - $190,000
NPV = $-29,456
The net present value of the proposed project is -$29,456.
The negative net present value indicates that the project is not financially attractive as it does not meet the company's minimum required return of 13%. The company should consider alternative investment options with a higher net present value.
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When the stock market as a whole is rising in value then it is referred to as a bear market. True or false?
Answers
Answer: False
Explanation: A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.
Sergei’s boss has very strong opinions and often frowns upon questions from the team. This creates an environment where everyone just agrees with the boss decisions without questioning them
Answers
Knowing and comprehending each team member's opinions personality type will enable you to assign tasks in a way that best suits their interests and passions.
By doing this, you will raise team morale and productivity to their highest levels. Therefore, I always let my manager know when I'm having an issue. I jot out a list of my annoyances. I request a meeting with my employer opinions and explain these issues in detail. I want to be sure I'm not coming out as rude or sounding like I'm making any accusations against my supervisor. Good staff knowledge results in higher output and results.
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Can someone please fill out this chart for accounting 1. will give brainliest and 100 points
Answers
Answer:
Sadly, I cannot answer, bacuase you are not showing us what is supposed to be filled out, nor any choices to fil it out with. If you were to give us the questions typed out, I’d be happy to answer!
A term used to know the grouping of instruments
Answers
Answer:
Explanation:
In most cases, a larger classical group is referred to as an orchestra of some type or a concert band. A small orchestra with fifteen to thirty members (violins, violas, four cellos, two or three double basses, and several woodwind or brass instruments) is called a chamber orchestra
you can purchase an optical scanner today for $400. the scanner provides benefits worth $60 per year. the expected life of the scanner is 10 years. scanners are expected to decrease in price by 20% per year. the annual interest rate is 10%. should you purchase the scanner today or wait 2 years to purchase it?
Answers
Purchasing the scanner today has a higher present value of benefits ($372.13) than waiting 2 years to purchase it ($297.70). However, purchasing it today also has a higher cost ($400) than waiting 2 years ($256).
To determine whether you should purchase the optical scanner today or wait 2 years to purchase it, we need to compare the present value of the benefits and costs of each option.
If you purchase the scanner today, the cost is $400. The benefits are worth $60 per year for 10 years. The present value of these benefits can be calculated using the formula for the present value of an annuity:
PV = (PMT / r) * (1 - (1 / (1 + r)^n)),
where PMT is the payment ($60), r is the interest rate (10%), and n is the number of periods (10 years). Plugging in these values, we get a present value of $372.13.
If you wait 2 years to purchase the scanner, the price will have decreased by 20% per year, so the cost will be $400 * (1 - 0.2)^2 = $256. The benefits will still be worth $60 per year, but you will only receive them for 8 years instead of 10. Using the same formula as above with n = 8 years, we get a present value of $297.70.
Taking both benefits and costs into account, it would be better to wait 2 years to purchase the scanner.
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Select the correct answer from each drop-down menu. Which stage of the selling process deals with the actual point of sale where the customer agrees to buy? which stage relates to the post-sale interaction with the customer? the stage relates to the point where the customer actually agrees to buy. The stage relates to the post-sale interaction with the customer.
Answers
The closing stage relates to the point where the customer actually agrees to buy. The follow-up stage relates to the post-sale interaction with the customer.
The closing stage refers to the moment in the sales process where the buyer really gives their consent to purchase. The interaction with the client that takes place after the sale constitutes the follow-ups stage of the process.
As a buyer or seller of real estate, you should be aware that the closing stage refers to the actual point of sale, which is when the client agrees to purchase the property. At this point, all of the arrangements have been finalised, and the buyer is now prepared to purchase the property.
You should also be aware that the stage that is associated with the engagement that takes place after the transaction with the consumer is the follow-ups stage. During the follow-ups, all of the tasks and procedures that are supposed to be finished following the closing stage are actually completed. And if you desire a career in real estate, you should commit these to memory for the rest of your life if you want to succeed.
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