The answer for this question is: Conservation
In most cases, conservation action in life insurance will be taken if a premium on a certain policy has been outstanding for a specific period of time.
In this case, to protect the company from any potential loss, they need to replace the insurance policy as soon as possible
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
The answer is 4.5 years
Given : semi annual bond
current market price : $988.52
par value : $1,000
maturity : 5.29%
PMT = 5% x $1000 / 2 = $25,
PV = $988.52,
FV = $1000, and
Int/half a year = 5.29%/2 = 2.645%.
Solving for N = 9 (semi annual periods).
9/2 = 4.5.
Answer: $47.50
Explanation:
The price pr share given debt and the number of shares if the company had both an all equity structure and a mixed structure can be expressed as;
Price per Share = Debt Value / (Number of Shares under All-equity plan - Number of shares under mixed plan)
Price per share = 109,250 / (15,000 - 12,700)
= 109,250 / 2,300
= $47.50
The answer is 40 because you have to divide 60 and then 1.50 to get your answer
