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Sedaia [141]
2 years ago
9

A 6 percent, annual coupon bond is currently selling at a premium and matures in 7 years. The bond was originally issued 3 years

ago at par. Which one of the following statements is accurate in respect to this bond today?a. The face value of the bond today is greater than it was when the bond was issued.b. The bond is worth less today than when it was issued.c. The yield-to-maturity equals the current yield.d. The coupon rate is less than the current yield.e. The yield-to-maturity is less than the coupon rate.

Business
2 answers:
Ksju [112]2 years ago
8 0

Answer:

e. The yield-to-maturity is less than the coupon rate.

Explanation:

When the yield is lower than the coupon rate, the bond is considered to be trading at a premium.

Price of bond = Present value of future coupon payments and present value of par value to be recieved on the date of maturity, discounting is done athe the rate at which market is prevailing.

Hence, if the yield rate is the prevailing market rate,coupon rate is compared to yield rate to invest in bond because the coupon is more compared to market rate.

Thus the investors would be charged more than the par value which is being traded at premium in order to set off the benefit of the payments of coupon.

vekshin12 years ago
6 0

Answer and Explanation:

the answer is attached below

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When an organization expands into a totally new line of business, it is implementing a strategy of:
Elina [12.6K]

Answer: The correct answer is "b. Unrelated diversification".

Explanation: When an organization expands into a totally new line of business it is implementing a strategy of <u>unrelated diversification</u> because it invests in a completely different line of business and not related to those previously managed by the organization.

3 0
2 years ago
TEW COMPANY Balance Sheet As of December 31 ASSETS Cash $ 20,000 Accounts receivable 80,000 Inventory 50,000 Net plant and equip
Mariana [72]

ANSWER: 57.5%

Debt to assets ratio:

= Total Liabilities / Total Assets

Given:

Cash $20,000

Accounts Receivable $80,000

Inventory $50,000

Net Plant and Equipment $250,000

Total Assets: $400,000

Accounts Payable $40,000

Accrued Expenses $60,000

Long Term Debt $130,000

Total Liabilities: $230,000

Computation:

= $230,000 / $400,000

= 57.5%

The interpretation of the figures shown is that 57.5% of the total assets are financed by the creditors of company instead of investors being funded by borrowing compared as how much was funded by the investors.

Generally, 40℅ ratio or lower is considered as a good debt ratio. Above than 60℅ ratio is said as poor ratio, because of the risk that the company will not be able to generate cash flows to finance and pay its debts.

Therefore, TEW Company has a normal and efficient ratio of 57.5% and is able to pay its debts.

3 0
2 years ago
Both Marianne and Bill examined the same set of qualitative data collected from couples in a study designed to understand relati
slava [35]

Answer: B. The coding scheme was not reliable.

Explanation: The most likely discrepancy for the of this study/research is the coding system, a coding system is an analytical tool used to categorize samples or treatments in order to effectively enhance the research or study  and to give correct results. Coding systems are also used in computer analysis for effective result presentation. Coding can be used in quantitative analysis such as Questionnaire results and in qualitative in the case of interview transcripts.

7 0
2 years ago
Moody Farms just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 3.8 percent pe
NISA [10]

Answer:

$34.63.

Explanation:

The Gordon Dividend Discount Model will be used to calculate the current share price. This model helps us to determine how much should we pay for a stock and the analysis is based on dividends, growth rate, and our required rate of return. The model is as follows:

Po = D1 / (1 + r )^1 + D2 / (1 + r )^2 + D3 / (1 + r )^3 + D4 / (1 + r )^4 + D5 / (1 + r )^5 + D6 / (1 + r )^6 + [(D7 / r - g) / (1 + r)^6]

where

Po = Current market Price

D1 = Dividend Paid * (1 + g)

D2 = D1 (1 + g) ; D3 = D2 (1 + g) ; D4 = D3 (1 + g) ; D5 = D4 (1 + g)  

D6 = D5 (1 + g) ; D7 = D6 (1 + g)

This implies that:

Po = 2.7507 / (1.15)^1 + 2.8552 / (1.15)^2 + 2.9637 / (1.15)^3 + 3.0763 / (1.13)^4 + 3.1932 / (1.13)^5 + 3.3146 / (1.13)^6 + [(3.4405/.11 - .038) / (1.13)^6]

⇒ Current Market Price = $34.63.

Note: Figures are rounded up-to 4 decimal points. A difference of up-to $2 would not affect your scores as far as the methodology is correct.

8 0
2 years ago
Eric, a ghost writer, conducted market research and discovered a niche market in writing scripts for corporate online videos. He
Lerok [7]

Answer: What is the best way to get his service to his target customers

Explanation:

Market research is the process of determining how viable a product will be after research has been conducted in the market. This is vital in getting opinions of customers.

Marketing mix are the marketing tools which an organization can use in order to pursue its marketing objectives.

The question that should be asked about the marketing mix placement is "What is the best way to get his service to his target customers". This is vital in knowing the best method to use in making the product available to the customers.

7 0
2 years ago
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