Five years ago, an investor purchased an ABC Corporation BBB-rated debenture with a coupon of 6% maturing in 2037. Currently, new BBB-rated debentures maturing in 2037 are being issued with coupons of 7%. Based on the discounted cash flow method, one could say that the present value of the investor's security is:
A. equal to the par value
B. less than par value
C. more than par value
D. negative
Answers
The present value of the investor's BBB-rated debenture with a coupon of 6% maturing in 2037 would be less than its par value due to new debentures with higher coupon rates being issued. Here option B is the correct answer.
The investor purchased a BBB-rated debenture from ABC Corporation five years ago with a coupon of 6% maturing in 2037. Currently, new BBB-rated debentures maturing in 2037 are being issued with coupons of 7%. To determine the present value of the investor's security using the discounted cash flow (DCF) method, we need to consider the cash flows from the debenture and the appropriate discount rate.
The present value of the investor's security can be calculated by discounting the future cash flows (coupon payments and the final principal payment at maturity) at an appropriate discount rate. The discount rate is typically determined by the risk associated with the investment.
Since new BBB-rated debentures maturing in 2037 are currently being issued with a coupon of 7%, it suggests that the market's required rate of return for similar investments has increased. As a result, the investor's existing debenture with a coupon rate of 6% is less attractive compared to the new issuances.
When the market's required rate of return increases, the present value of future cash flows decreases. Therefore, using the DCF method, the present value of the investor's security would be less than its par value. This means that option B, "less than par value," is the correct answer.
In summary, based on the discounted cash flow method, the present value of the investor's BBB-rated debenture with a coupon of 6% maturing in 2037 would be less than its par value because new BBB-rated debentures with higher coupon rates are currently being issued in the market. Therefore option B is the correct answer.
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Related Questions
A business analyzes what competitors are charging for products.
Answers
When a business analyzes what the competitors are charging for their products, it is known as the process of marketing info management.
What is the significance of business competitors?A business competitor can be referred to or considered as an organization that deals in the same product that is offered for sale by other enterprises in the same market.
It is important for a business to keep an eye on the acts of its competitors, as it helps them in keeping themselves updated with marketing info management.
Therefore, the significance regarding the business competitors has been aforementioned.
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Mary is a stay-at-home mother whose husband died. She has two small
children to care for, and her husband was the primary wage earner for their
family. What Social Security benefits would care for Mary and her children?
A) retirement benefits
B) disability benefits
C) survivor’s benefits
D) worker’s compensation
Answers
Answer:
The answer that I think would be correct is option C (survivors benefits)
Explanation:
Retirement benefits definition: a form of social insurance payment made by the US Social Security (for age 62 and older) considering that Mary has two small kids, she probably isn't that old.
Disability benefits: in order to be eligible, you have to be unable to do regular or customary work for at least right days. Considering the fact that Mary is a stay at home mother then she wouldn't be employed.
Survivors benefit: this allows a retiree to ensure after death, a continuous lifetime annuity for their dependents.
Workers compensation: provision of benefits to employees who suffered work related injuries. Mary's husband most likely didn't die in the work place.
Kaylee i working two ummer job, making $6 per hour walking dog and $13 per hour landcaping. Lat week Kaylee worked a total of 8 hour and earned a total of $83. Determine the number of hour Kaylee worked walking dog lat week and the number of hour he worked landcaping lat week
Answers
Let's label the amount of hours Kaylee worked walking dogs "x". And let's label the amount of hours Kaylee worked landscaping "y".We are aware of the following.
x + y = 8 (hours worked in total) (hours worked in total) 6x + 13y = 83 (total earnings) (total earnings) We can solve for one of the variables, say y, using the first equation: y = 8 - x Put this into the second equation: 6x + 13(8 - x) = 83 6x + 104 - 13x = 83 \s-7x = -21 \sx = 3 Kaylee therefore spent 3 hours walking dogs and 8 hours - 3 hours = 5 hours gardening. Kaylee i working two ummer job, making $6 per hour walking dog and $13 per hour landcaping. Lat week Kaylee worked a total of 8 hour and earned a total of $83. Determine the number of hour Kaylee worked walking dog lat week and the number of hour he worked landcaping lat week.
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what is your annual rate of return if you invest $1,000 in a stock on january 1, 2017 and it increases in value by $50 by january 2, 2018, and pays four dividends of $12.50?
Answers
he annual rate of return on the stock investment would be approximately 16.25%.
To calculate the annual rate of return, we need to take into account the increase in stock value as well as the dividends received. The increase in value of $50 represents a gain of 5% on the original investment of $1,000.
The total amount of dividends received would be $12.50 x 4 = $50. So, the total return on investment would be $50 (capital gain) + $50 (dividends) = $100.
To calculate the annual rate of return, we need to divide the total return by the initial investment and then annualize it.
Total Return / Initial Investment = ($100 / $1,000) = 0.1
To annualize this, we need to take into account the number of days between January 1, 2017, and January 2, 2018, which is 366 (including the leap year).
Annualized Rate of Return = (1 + Total Return / Initial Investment) ^ (365 / Number of Days) - 1
Annualized Rate of Return = (1 + 0.1) ^ (365 / 366) - 1 = 0.1625 or approximately 16.25%.
Therefore, the annual rate of return on the stock investment would be approximately 16.25%.
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list one career cluster and three career pathways related to this cluster
Answers
Answer:
Business Management & Administration: General Management pathway: general manager: Walmart.
Business Management & Administration: Business Information Management pathway: IT manager: Walmart.
Business Management & Administration: Human Resources Management pathway: HR director: Meijers.
Business Management & Administration: Operation Management pathway: Operations manager: Meijers.
Business Management & Administration: Administrative Support pathway: Administrative assistant: Kroger.
Finance: Securities & Investments pathway: Bank teller: Huntington.
Finance: Business Finance pathway: accountant: Kroger.
Finance: Accounting pathway: auditor: H&R Block.
Finance: Insurance pathay: insurance claim agent: Amica.
Finance: Banking Services pathways: bank teller: Huntington.
Marketing: Marketing Management pathway: forecast manager: Adidas.
Marketing: Professional Sales pathway: salesperson: Adidas.
Marketing: Merchandising pathway: Sales Promotion manager: Walmart.
Marketing: Marketing Communications pathway: Advertising manager: Adidas.
Marketing: Marketing Research pathway: product planner: Nikes.
Explanation:
Business management and administration can be one of the career clusters.
What is a career?You maintain the same line of employment when you have a career. A profession can consist of one or several jobs. You may work for a single corporation or several. A career education, experience, and professional experience. A career is often referred to as a "career path."
One of the career clusters is a business management and administration.
Three paths to careers in this cluster
Management of corporate information will help them to become managers and know how to handle people.Management, in general, will help in smooth working. Human resource administration will make sure that the relationship between the employee and the employer is working smoothly.Learn more about career, Here:
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What are the issues the company
will face if it suffers a devastating fire and will be unable to
produce products for the next 18 months. What is the action plan
that will minimize the impact on the c
Answers
If a company suffers a devastating fire and cannot produce goods for the next 18 months, it is likely to face a variety of issues, including loss of revenue and market share, as well as potential legal and regulatory consequences.
An action plan can be developed to reduce the impact on the company by taking specific steps.
Here are the issues the company will face if it suffers a devastating fire:
Loss of revenue: The inability to produce products for 18 months will result in a significant loss of revenue for the company. This may cause the company to lose its market position and profitability, which can lead to bankruptcy.
Legal and regulatory consequences: The fire and its aftermath may have legal and regulatory implications. The company may face legal claims from its employees, shareholders, and other stakeholders. Additionally, regulatory bodies overseeing workplace safety and environmental standards may impose fines and penalties.
Loss of market share: The company may lose its market share and brand value due to the fire. Customers may lose faith in the company and its products, leading them to switch to more reliable competitors.
The following steps can be taken to minimize the impact on the company:
Implement a business continuity plan: Develop a business continuity plan (BCP) that outlines steps to cope with the effects of the fire. The BCP should include a contingency plan for product distribution and identify alternate production sites or partners.
Regular testing and review of the plan is essential to ensure its effectiveness.
Rebuild the company's reputation: After the fire, the company needs to rebuild its reputation. It should take measures to reassure customers, employees, and other stakeholders that it is actively addressing the situation and implementing measures to prevent future incidents. Compensation may be offered to those who suffered due to the fire.
Collaborate with stakeholders: The company should collaborate with its stakeholders to address the issues arising from the fire. This includes working closely with employees, suppliers, and regulatory bodies to resolve legal and regulatory implications.
The company may also consider strategic partnerships with other companies to meet its production needs during the recovery period.
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1. If Julia’s a Cobb-Douglas utility function. A)What are her optimal values of q1 and q2 in terms of income (M), prices (P1 and P2) and the positive constant?
b)What is the marginal rate of substitution between q1 and q2?
Answers
The Cobb-Douglas utility function, which has the formula u(x, y) = x a y 1 - a, is one of the most popular. Constant Elasticity of Substitution (CES) utility function is another typical utility function.
The formula for this function is: u(x, y) = (a x r + b y r) 1/r. The consumption levels of two different types of goods, let's say X and Y, are used in place of K and L as inputs when the Cobb-Douglas function is used as a utility function. A utility-maximizing consumer will allocate a piece of their money to good X and a portion to good Y using this utility function.
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forms of activity that have some of the characteristics of orthodox businesses but are illegal are called
Answers
The forms of activity that have some of the characteristics of orthodox businesses but are illegal are called illicit businesses.
An illicit business is a term used to describe a type of business activity that is illegal or forbidden by law, government policies, or societal norms. Examples of such businesses include drug dealing, human trafficking, money laundering, piracy, and tax evasion. These businesses often have some characteristics of lawful businesses such as revenue streams, organizational structures, and customer relations.
However, their operations are not regulated by the government, making them illegal and often dangerous for their participants. Illicit businesses are often organized and have hierarchies similar to legal businesses. They may involve corruption, blackmail, or other illegal activities that are harmful to society.
Governments worldwide are working to combat such activities through law enforcement agencies, and many countries have enacted legislation to address the issue.
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mark, vice president of human resources at executive corporation, is a(n) ____ level manager.
Answers
Answer:
Mark is a UPPER level manager
Explanation:
^^^^
. Which part of the online job application was easiest for you to complete? Which section was the most difficult? Give at least one example of work experience, education, or special skills that you included in the application.
Answers
Answer:
Easy & difficult part of online job application, things mentioned.
Explanation:
Part of online job application easiest to complete - Time & Place Flexibility, Less scope of inaccuracies
Difficult section - Lack of physical interaction with the organisation can make someone lack crucial information regarding organisation's favourable & unfavourable criterias, preferences.
Work experience, special skills included in application (consecutively) - Internships with prestigous organisations, Public communication & leadership skills (consecutively)
PLEASE ANSWER QUICKLY
What does the FLSA prescribe?
A.
regular audits of a company’s financial accounts
B.
employment of people with disabilities
C.
standards for the basic minimum wage and overtime pay
D.
granting paid leaves to individuals to practice religious beliefs
Answers
Answer:
C.
standards for the basic minimum wage and overtime pay
Explanation:
Hope this helps you
Pls mark me the brainliest
Answer:
C.
standards for the basic minimum wage and overtime pay
Explanation:
Correct on Edmentum
The wearing away of the Earth's surface is called
Answers
Answer:
Erosion is the wearing away of the Earth's surface.
Which phrase best completes the diagram?
Macroeconomic Goals for a Society
?
Stable prices
Economic growth
A. Increased inflation
B. Per capita GDP
C. Full employment
D. Decreased production
Answers
Answer:
Full Employment
Explanation:
just took the test
The phrase that best completes the given diagram is the full employment. Option C is correct.
What is macroeconomic?Macroeconomics is defined as a discipline of economics that studies an economy's whole performance, behavior, structure and decision-making.
This includes the economics of the country, region, and the world. The main goal of macroeconomics involves the full employment, then if the country is fully employed, this will make the prices stable and at last the economic growth occurred.
Therefore, option C is correct.
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______ Is a market in which a large number of suppliers compete with each other to satisfy the needs and wants of a large numbers of consumers at a competitive price.???
Answers
Answer : Monopolistic competition
Answer:
Monopolistic Competition
Explanation:
In a monopolistic competitive market, there are large numbers of sellers who do not sell identical products instead they sell differential products. They compete with each other at a competitive price. The products could be differentiated in many ways including quality, style, location and even brand name. Since they compete at a competitive price, if there is a substantial rise in the price of any of the products, the buyers could quickly shift from one product to another. The most crucial factor behind product differentiation is because of geographical factors. Under a monopolistic competitive market, the sellers do not have any influence over customer loyalty and limited control over the price.
Who heads each of the branches of federal reserve banks and looks after their functioning?
Answers
Answer: The chair of the board, governors of the federal reserve system is the chief of the federal reserve which is the central banking system of the United States.
Answer:
Board of Governors
Explanation:
lars deposited $50 into
Answers
Answer:Lars deposited $50 into a savings account for which interest is compounded quarterly. According to the rule of 72, what interest rate will cause his money to double in approximately 29 years? A 0.6% B 1.7%
Explanation:idek this is what i could find ab this question hope its right!
Answer:
0.6
Explanation:
how can you solve circle geometry in a simple way
Answers
Answer: by using the formula A=pi(3.14) R(radius) squared
Explanation:
Hope that helped
The area is equal to pi multiplied by the square of the radius: a=π⋅r2.
The perimeter of a circle (called the circumference) is equal to pi times the diameter: C=π⋅d.
The highest-income quintile of the population receives 13 times as much income as the lowest-income quintile. However, the highest-income quintile only spends 4 times as much as the lowest-income quintile. Identify the possible reason or reasons for this stark difference between income inequality and consumption inequality. a. The richest quintile has the ability to save a larger percentage of its income. b. Individuals experiencing temporary fluctuations in their incomes are more likely to maintain moderate spending habits.c. Intergenerational mobility allows children to consume more than their parents. d. The poverty line does not reflect relative poverty.
Answers
The richest quintile has the ability to save a larger percentage of its income. Option A is true.
What income quintile signify?The highest income quintile is able to acquire wealth and invest it in assets like stocks, bonds, and real estate that produce more income because they can save a bigger percentage of their income. Because of this, their income grows faster than their spending. In contrast, those in the lowest income quintile are more likely to spend the majority of their income on basics like housing, food, and healthcare, leaving little money left over for savings or investments. The mismatch between income disparity and consumption inequality can also be influenced by other elements like credit availability, varying levels of education, and disparities in employment prospects.
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as a business within the company, hr has three product lines, one of which involves contributing to the company's strategy by understanding how hr can provide a competitive advantage. this is known as .
Answers
As the product lines involves contributing to the company's strategy by understanding how hr can provide a competitive advantage, this is known as being a strategic partner.
What is a strategic partner?These are partners involves in the sharing of resources to help all involved succeed. They are usually non-competing businesses and often share both the risks and rewards of the decisions of both companies.
Most time, the ultimate goal of the strategic partnership is to create value for each company by offering information, services and other resources that the other firm either has no access to or could only access through some form of financial exchange.
Therefore, this strategy is known as being a strategic partner.
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What is improved oven? in your own words.
Answers
Answer:
improved oven means improved cooking
Sue is considering splitting the cost of a new TV with her roommate. Her share would be $305.22. Can Sue afford this
Answers
Yes, she can make the purchase and have money left over.
Which of the following is NOT a consumer service?
a.Grocery stores
b.Barber shops
c.Wholesaling
d.Beauty shops
e.Tourism
Answers
c. Wholesaling.
Wholesaling is not a consumer service.It refers to the business of selling goods or merchandise in large quantities to retailers or other businesses rather than directly to consumers.
Wholesalers act as intermediaries between manufacturers or producers and retailers, facilitating the distribution of goods in the supply chain.
On the other hand, the other s listed are consumer services:
a. Grocery stores: These establishments provide food and other household products directly to consumers.
b. Barber shops: They offer hair cutting, styling, and grooming services primarily for individual consumers.
d. Beauty shops: These establishments provide various beauty services such as hairstyling, makeup, skincare, and nail care to individual consumers.
e. Tourism: Tourism encompasses services related to travel, accommodation, attractions, and experiences for individual consumers who are visiting different destinations for leisure, business, or other purposes.
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Alright y'all, I made a cover for my powerpoint, for a school project, and it took me an embarrassingly long time to make. Please give me some feedback on it. What do you like and what don't you?(There's no wrong answer, but please give a relevant one because I really want to know what y'all think.)
Answers
Answer:
I saw the pic. I think it looks great :)
Explanation:
Also it doesn't matter how long it took, I bet it feels good knowing you made that yourself.
Part II: Elastic or Inelastic?
Instructions: Determine whether the demand for the following items is price clastic or inelastic,
Write your answer on the line after the item. Then write the reasons for your answer.
A. Salt
Why?
B. New cars
Why?
C. Pork chops
Why?
D. European vacation
Why?
E. Insulin
Why?
F. Insulin at one of four drug
stores in a shopping mall
Why?
G. Gasoline purchased one day
after a 20 percent price increase
Why?
I
HL Gasoline purchased one year
after a 20 percent price increase
Why?
Answers
a. The demand for salt is price inelastic. This is because salt is considered a necessity in making meals.
b. The demand for new cars is price elastic. This is because there are many substitutes for new cars. For example, the bus is a substitute for a new car.
c. The demand for pork chops is price elastic. This is because there are many other types of foods that can be consumed instead of pork chops.
d. The demand for European vacation is price elastic. This is because vacations are not a necessity; they are a luxury.
e. The demand for Insulin is price inelastic. This is because insulin is very important to a diabetic patient
f. The demand for Insulin at one of four drug stores in a shopping mall is price inelastic. This is because consumers have choices between the four drug stores in the mall
g. The demand for gasoline purchased one day after a 20 percent price increase is price inelastic. This is because in the short run, consumers do not have enough time to search for suitable substitutes, so demand would be inelastic
h. The demand for gasoline purchased one year after a 20 percent price increase is price elastic. This is because in the long run, consumers would have enough time to find suitable substitutes.
Demand is price elastic if the quantity demanded of a good is sensitive to small changes in the price of the good
Demand is considered inelastic if the quantity demanded of a good is less sensitive to changes in the price of a good.
Factors that affect the price elasticity of demand
Time frame: demand is inelastic in the short run because consumers would not have enough time to find cheaper substitutes. In the long run, demand is elastic because consumers would have enough time to search for substitutes. Number of close substitutes : If there are many substitutes for a good, the demand for the good would be elastic. If there are no close substitutes, the demand for the good would be inelastic Nature of the good: if the good is considered a necessity, the demand for the good would be inelastic and if the good is considered a luxury, the demand for the good would be inelastic.To learn more about elasticity of demand, please check: https://brainly.com/question/14897348?referrer=searchResults
My last points to help you.
Answers
Answer:
Thank you, I can help you too dear :)
Explanation:
Answer:)
Explanation:
Whose permission do you need to write or arrange pieces that are Traditional or in the Public Domain? I said copyright owner but my teacher says I’m wrong
Answers
Answer:
Explanation:
She's right, but you have a nice thought. It is always a good idea to try to give credit where credit is due.
Public Domain refers to written material that no one has a lien on. No one owns the copywrite. No one holds any claim on the material at all. So there is no need to try and get permission because no one is listed to get the permission from.
If you have a cell phone that does just about everything but make coffee in the morning, you can download an app called free books. Some are very good. They are all in public domain.
in march 2020, governor greg abbott is sued executive order ga 11 directing travelers entering texas to quarantine for 14 days to ensure that covid-19 did not spread to others. in addition, stores, bars, restaurants, and schools closed in the hopes of slowing the spread of the virus. considering texas's move to technology and high-tech, how might those industries have been impacted, positively or negatively, during the shutdown?
Answers
The shutdown due to COVID-19 likely had mixed impacts on Texas's technology and high-tech industries.
While some sectors may have struggled due to the pandemic restrictions, others could have seen a surge in demand.
On the negative side, supply chain disruptions and economic uncertainties might have affected the hardware side of tech industries. Conversely, on the positive side, the shift to remote work and online learning would have increased demand for digital solutions, cloud services, and e-commerce. This would have led to growth in certain areas of the technology sector, particularly those involved in providing remote connectivity and virtual services.
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I. You are valuing an investment that will pay you $26,000 per year for the first 9 years, $34,000 per year for the next 11 years, and $47,000 per year the following 14 years (all payments are at the end of each year). Another similar risk investment alternative is an account with a quoted annual interest rate of 9. 00% with monthly compounding of interest. What is the value in today's dollars of the set of cash flows you have been offered
Answers
To calculate the present value of the investment, we need to discount each cash flow to its present value and then add them up. the value in today's dollars of the set of cash flows you have been offered is $1,047,917.98.
First, let's calculate the present value of the first 9 years of cash flows of $26,000 per year. We can use the formula for the present value of an annuity:
PV = C x \(((1 - (1 + r)^{-n} ) / r)\)
where PV is the present value, C is the cash flow per period, r is the interest rate per period, and n is the number of periods.
In this case, C = $26,000, r = 0.09/12 = 0.0075 (monthly rate), and n = 9 x 12 = 108 (number of months). Plugging these values into the formula, we get:
PV1 = $26,000 x ((1 - \((1 + 0.0075)^{-108} )\) / 0.0075) = $217,904.05
Next, let's calculate the present value of the next 11 years of cash flows of $34,000 per year. We can use the same formula, but with n = 11 x 12 = 132 (number of months) and C = $34,000. Plugging in the values, we get:
PV2 = $34,000 x ((1 - \((1 + 0.0075)^{-132} )\) / 0.0075) = $332,401.78
Finally, let's calculate the present value of the last 14 years of cash flows of $47,000 per year. Again, we can use the same formula, but with n = 14 x 12 = 168 (number of months) and C = $47,000. Plugging in the values, we get:
PV3 = $47,000 x ((1 - \((1 + 0.0075)^{-168} )\) / 0.0075) = $496,611.15
The total present value of the cash flows is the sum of the present values of each cash flow:
PV = PV1 + PV2 + PV3 = $1,047,917.98
Therefore, the value in today's dollars of the set of cash flows you have been offered is $1,047,917.98.
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Which of the following is not a reason people choose to hold money balances?
A. Money holdings are good assets during periods of inflation.
B. Liquidity.
C. Reduced risk compared to other assets.
D. Having cash to pay for unplanned expenditures and emergencies.
Answers
C. Reduced risk compared to other assets.
the desire to hold money: the decision to keep your wealth in cash rather than invest it or use it to buy products and services or other financial assets.
What are the drawbacks of retaining money, please?Holding cash has the drawback of earning little to no interest. Why does a rise in interest rates result in a drop in the amount of money demanded? because their relationship is inverted.
when a person chooses to hold money rather than other assets?a loss of opportunity. An individual forfeits the interest that could have been generated by holding other sorts of assets when they choose to hold money instead of those other assets.
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China's growth rate has___
that of most other countries,___
A. topped, but its real GDP per person declined in 2008–2009.
B. lagged behind, and its real GDP is close to other Asian economies
C. lagged behind; but its real GDP per person is higher than other Asian economies
D. equalled, and its real GDP per person declined in 2008-2009.
E. topped, but its real GDP per person is still lower than other industrialized countries
Answers
Answer: E. topped, but its real GDP per person is still lower than other industrialized countries
Explanation:
China has seen consistent growth for much of the past 20 years which has enabled them to topped the growth rate of most other countries.
Their real GDP per person however, is still lower than other industrialized nations like the U.S. and U.K.
This is due to their large population - largest in the world - making their GDP per person appear smaller despite them having a very substantial real GDP.