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2 years ago

Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which of

Business

1 answer:

miss Akunina [59]2 years ago

8 0

Answer:

19.05%

Explanation:

the approximate yield to maturity (YTM) formula is:

approximate YTM = {C + [(FV - PV) / n]} / [(FV + PV) / 2]

C = coupon payment = $130
FV = face value or value at maturity = $1,000
PV = present value or current market value = $690
n = 10 years

approximate YTM = {$130 + [($1,000 - $690) / 10]} / [($1,000 + $690) / 2] = ($130 + $31) / $845 = $161 / $845 = 0.1905 or 19.05%

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Which job in the Finance career cluster is ideal for a person with a master’s degree?

nasty-shy [4]

Answer:

i put d

Explanation:

5 0

2 years ago

Read 2 more answers

Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $68, and the book value per share is

eimsori [14]

Answer:

WACC = 15.08%

Explanation:

Some information is missing:

"The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 97 percent of par. The second issue has a face value of $40 million, a coupon rate of 6.5 percent, and sells for 108 percent of par. The first issue matures in 21 years, the second in 6 years."

In order to calculate WACC we must first determine the YTM and market values of the 2 bonds.

bond 1:

market value = $70,000,000 x 0.97 = $67,900,000

YTM = {4,200,000 + [(70,000,000 - 67,900,000)/21]} / [(70,000,000 + 67,900,000)/2] = 4,300,000 / 68,950,000 = 6.24%

bond 2:

market value = $40,000,000 x 1.08 = $43,200,000

YTM = {2,600,000 + [(40,000,000 - 43,200,000)/6]} / [(40,000,000 + 43,200,000)/2] = 2,066,667 / 41,600,000 = 4.97%

weighted average cost of debt:

total value of debt = $67,900,000 + $43,200,000 = $111,100,000

weighted average cost = [($67,900,000/$111,100,000) x 6.24%] + [($43,200,000/$111,100,000) x 4.97%] = 3.814% + 1.933% = 5.75%

cost of equity (Re):

$68 = ($8 x 1.05) / (Re - 5%)

Re - 5% = $8.40 / $68 = 12.35%

Re = 17.35%

outstanding stock's market value = 7,000,000 x $68 = $476,000,000

WACC = [($476,000,000/$587,100,000) x 17.35%] + [($111,100,000/$587,100,000) x 5.75% x 0.79] = 14.07% + 1.01% = 15.08%

7 0

2 years ago

The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable cos

Effectus [21]

Answer:

In order to maximize average daily profit, optimal number of reservations = 100 rooms.

Explanation:

As for the provided information, we have

Total number of rooms = 100

Chances of guests not arriving = 5%

Therefore, guests to arrive = 95%

Thus, bookings = 100/95% = 105.26

Rounding off we have 105 rooms,

Let us assume, all rooms are booked and no cancellation is done, in that case,

Total revenue = $150 $\times$ 100 = $15,000

Less: Overbooked charges = $200 $\times$ 5 = ($1,000)

Less: Variable Cost = $30 $\times$ 100 = ($3,000)

Thus total revenue will be $11,000

In case of booking of 100 rooms the net revenue in case of 5% cancellations, shall be:

Rooms booked = 100 - 5% = 95

Revenue = 95 $\times$ $150 = $14,250

Less: Variable Costs = 95 $\times$ $30 = ($2,850)

Thus total revenue = $11,400

Since profit in case of booking 100 rooms is more in any case, even in case of least cancellation the revenue will increase.

Thus, this is the optimal number of reservations = 100

6 0

2 years ago

Lopez Sales Company had the following balances in its accounts on January 1, 2018: Cash$68,000 Merchandise Inventory 48,000 Land

maxonik [38]

Answer:

Lopez Sales Company

1. Amount of Gross Margin recognized by Lopez:

Sales = $81,600

Less cost of sales = $38,400

Gross Margin = $43,200

2. Amount of the gain on the sale of land recognized by Lopez:

Land:

Selling price = $81,000

less Cost = $43,200

Gain on sale = $37,800

Explanation:

a) Gross margin is the difference between the selling price and the cost price of a product. It is the profit determined before business running expenses are deducted to obtain the net income or margin.

It measures the ability of the business to generate enough income to cover expenses that are normally incurred in business, like rent, utilities, and salaries and wages.

b) The Gain on sale of any capital asset is the difference between the selling price and the cost (book value). This gain is reported separately in the income statement and is the subject of capital gains tax.

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2 years ago

Southeastern Oklahoma State University's business program has the facilities and faculty to handle an enrollment of 2,200 new s

docker41 [41]

Answer:

a. 0.7273 or 72.73%

b. 0.8875 or 88.75%

Explanation:

a. Utilization rate is the ratio of the amount of installed capacity planned to be used relative to the total installed capacity. This can be stated as follows:

Utilization rate = ICP ÷ TC ......................................... (1)

ICP = Amount of installed capacity planned to be used

TC = Total installed capacity

From the question, ICP = 1,600 while TC = 2,200. Substituting this into equation (1), we have:

Utilization rate = 1,600 ÷ 2,200 = 0.7273 or 72.73%

Therefore, utilization rate is 0.7273 or 72.73%.

b. Efficiency rate is the ratio of the actual installed capacity used relative to the amount of installed capacity planned to be used. This can be stated as follows:

Efficiency rate = AIC ÷ ICP ......................................... (1)

AIC = Actual installed capacity used

ICP = Amount of installed capacity planned to be used

From the question, ICP = 1,420 while TC = 1,600. Substituting this into equation (1), we have:

Efficiency rate = 1,420 ÷ 1,600 = 0.8875 or 88.75%

Therefore, efficiency rate is 0.8875 or 88.75% .

3 0

2 years ago