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matrenka [14]
2 years ago
4

Suppose a corporation issued a 20-year annual, 7 percent bond, 10 years ago. The bond is currently selling for 92 percent of its

face value, or $920. What is the corporation’s cost of debt?
Business
1 answer:
Bad White [126]2 years ago
6 0

Answer:

Cost of debt = 8.13 %

Explanation:

<em>The cost of the debt would be equal to the yield on the bond.</em>

<em>The Yield to maturity is the discount rate that equates then price of the bonds to the present of cash inflows expected from the bond  </em>

<em>The yield on the bond can be determined as follows using the formula below:  </em>

YTM = C + F-P/n) ÷ 1/2 (F+P)  

YTM-Yield to maturity-  

C- annual coupon  

F- Face Value  

P- Current Price  

n- years to maturity  

YTM-?, C- 7%× 1000 =70, Face Value - 1,000, P-920, n- 10

YTM = (70 + (1000-920)/10) ÷ ( 1/2× (1000 + 920) )  

YTM = 0.08125  × 100 = 8.13 %  

Yield to Maturity =8.13 %

Cost of debt = 8.13 %

 

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Nostrana [21]

Answer:

$47,500

Explanation:

The computation of the dollars amount received for the 5,000,000 yen is shown below:

= Expected yen receivable × forward rate

= 5,000,000 × $.0095

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To find out the dollar amount we multiply the Expected yen receivable  with the forward rate so that accurate value can come. And, we ignored the current spot rate and the turns out spot rate

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2 years ago
REI has a 100% satisfaction guarantee on its items. It allows customers to return products up to one year after purchase. This i
Vanyuwa [196]

Answer: risk

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REI utilises this option in an effort to reduce costs attributed to risk. For customers, this is a powerful tool as they are allowed to try the product, while knowing that if they don't like it then they can return it for a full refund. For REI, it increases customer trust as it allows customers to believe that the product is worth the sales price. It also reduces risk as REI is able to test the product out to actual customers and get a feel for if they like it, and what can be improved if needed.

3 0
2 years ago
An important __________ for Medtronic's Micra pacemaker is its unmatched small size, about the size of a vitamin capsule, which
Keith_Richards [23]

Answer:

point of difference

Explanation:

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This point of difference that Medtronic's Micra pacemaker has that ,make his vitamins available for implantation directly to the heart without surgery, is as a result of point of difference in a company gives a differentiation between him/her and his/her others organization or business offering the same services.

8 0
2 years ago
You want to purchase a new condominium that costs $287,500. Your plan is to pay 25 percent down in cash and finance the balance
Mama L [17]

Answer:

The monthly payment is $1,568.07  

Explanation:

The amount required to purchase the condominium is $287,500,however the amount of finance required is :$287,500-($287,500*25%)= $215,625.00  

The monthly mortgage payment required can be computed using the pmt formula in excel"

=pmt(rate,nper,-pv,fv)

rate is the payable on the mortgage on monthly basis which is 3.75%/12=0.003125

nper is the number of years of mortgage multiplied by 12 months since 12 monthly repayments are required in a year i.e 15*12=180

pv is the actual mortgage value is $215,625

fv is the future value of the mortgage and it is unknown

=pmt(0.003125 ,180,-215625,0)

pmt=$1,568.07  

6 0
2 years ago
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Oduvanchick [21]

Answer:

c. place----distribution  

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Of course, there is room for improvement, as they have already noted the customer requests for such a distribution channel and they have a steady demand.

To secure (and increase) their existing customer base from the competitor, Sydney's company has to put <u>place and distribution</u> of its products in the marketing focus.

3 0
2 years ago
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