Genuine Inc. issued a 15-year bond that is Callable in 10 years. It has a coupon rate of 8% payable semn'annually , a yield to maturity of 5.5 %. and a call premum of $100. What is the field to call?
a. 2.124
b. 5.45% c. 4.76% d. 7.59% e. 15.18% f. 9.521 %

Answers

Answer 1

The yield to call is 4.76%.

To calculate the yield to call, we need to find the rate that makes the present value of the bond equal to the call price plus the present value of the remaining coupon payments. In this case, the call price is $100 higher than the face value of the bond, so we need to adjust the cash flows accordingly.

Using a financial calculator or spreadsheet, we find that the yield to call is 4.76%. This is the rate at which Genuine Inc. could refinance the bond by issuing a new bond with a lower coupon rate and use the proceeds to call the outstanding bond.

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Related Questions

a strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals is a(n) .

Answers

A strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals is called a strategic fit.

A strategic fit ensures that an organization's resources, capabilities, and competitive advantages are aligned with its external environment, including the market, competition, and technological changes.

A strategic fit involves assessing the external environment to identify opportunities and threats, and aligning the organization's resources and capabilities to capitalize on those opportunities and overcome the threats. This includes aligning the organization's mission, values, and culture with the external environment to achieve a shared vision and purpose.

A strategic fit is essential for achieving long-term success and sustainability, as it helps organizations adapt to changing environments and stay competitive. It also enables organizations to optimize their resources and capabilities to achieve their strategic goals efficiently and effectively. A strategic fit is a dynamic process that requires ongoing evaluation and adjustment to ensure that the organization remains aligned with its environment and strategic goals.

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describe each of the five objectives of the phoenix project. what level of effort would be required to accomplish these objectives?

Answers

The five objectives of improvement of the Phoenix Project are to improve:

Business/IT Alignment, Project Delivery Efficiency, IT Operations Efficiency, Continuous Improvement and Security and Compliance.

What are the objectives of the Phoenix Project

The five objectives of the Phoenix Project are to improve the following areas:

1. Business/IT Alignment:

Ensuring that IT projects and resources are aligned with the organization's strategic goals, requiring effective communication and collaboration between business and IT teams.

2. Project Delivery Efficiency:

Streamlining the delivery of IT projects by eliminating bottlenecks, adopting agile methodologies, and utilizing automation where appropriate. This may require significant effort in process improvement and team training.

3. IT Operations Efficiency:

Enhancing the performance and reliability of IT systems by implementing best practices in areas like incident management, monitoring, and capacity planning. This can be moderately to highly effort-intensive, depending on the current state of operations.

4. Continuous Improvement:

Fostering a culture of continuous learning and improvement within the organization, which may involve regular reviews, feedback, and training. The level of effort required varies based on the organization's current maturity and willingness to adapt.

5. Security and Compliance:

Ensuring that IT systems and processes comply with relevant regulations and are secure from potential threats. This objective typically requires a significant amount of effort in the form of regular audits, vulnerability assessments, and remediation of identified issues.

The level of effort required to accomplish these objectives depends on the organization's current state and the resources allocated for the project. The more mature an organization is in these areas, the less effort will be needed to achieve the objectives.

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how materials are received, how debris is disposed of, and how everyday workers and visitors circulate throughout the job site are major factors in a job's safety program

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The given statement "How materials are received, how debris is disposed of, and how everyday workers and visitors circulate throughout the job site are major factors in a job's safety program" is True because managing the reception of materials, debris disposal, and the circulation of workers and visitors is essential for maintaining a safe and efficient job site.

Firstly, proper handling and storage of materials play a vital role in a job's safety program. Materials must be received, inspected, and stored safely to prevent accidents and damage. This process involves using appropriate equipment, such as forklifts and cranes, and ensuring that materials are stored securely to prevent falls, trips, and other hazards. Adequate signage and designated storage areas also contribute to a safer workplace.

Secondly, efficient disposal of debris is critical to maintaining a clean and safe job site. Debris can pose various hazards, including tripping, fire risks, and obstruction of access routes. A well-organized system for debris disposal, including regular cleanup, designated disposal areas, and proper waste management, minimizes potential risks and ensures a safer work environment.

Lastly, the circulation of workers and visitors throughout the job site must be carefully managed to minimize accidents and ensure everyone's safety. Clearly marked walkways, restricted areas, and proper signage help guide workers and visitors, reducing the risk of accidents. Additionally, providing appropriate personal protective equipment (PPE) and training for workers ensures they are aware of potential hazards and can navigate the job site safely.

The question was incomplete, Find the full content below:

how materials are received, how debris is disposed of, and how everyday workers and visitors circulate throughout the job site are major factors in a job's safety program. True or false.

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who regulates the practice of pharmacy? select one: a. national pharmaceutical association b. american pharmacy association c. american association of health-system pharmacists d. state board of pharmacy

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The practice of pharmacy is regulated by the State Board of Pharmacy in each state of the United States. Option d is answer.

The State Board of Pharmacy is responsible for protecting the public's health and safety by ensuring that licensed pharmacists and pharmacies comply with state pharmacy laws and regulations. They also regulate pharmacy technicians, interns, and pharmacy facilities to ensure that they are operating in compliance with state and federal regulations.

The State Board of Pharmacy is responsible for a range of activities, including issuing and renewing licenses for pharmacists and pharmacies, enforcing pharmacy laws and regulations, investigating complaints and violations, and conducting inspections. They also work to ensure that drugs are dispensed safely and effectively, and that pharmacists are practicing within the scope of their license and training.

Option d is answer.

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1. Suppose IBM is currently selling for $100 per share, the one period risk free rate is 8% and IBM pays no dividends over the period. Consider a one period European call on IBM with K=$50. a. IBM will either go up by 20% or down by 5%. What is the value of the call one period from expiration? b. Now suppose IBM will go up by 40% or down by 40%. What is the value of the call one period from expiration? Explain any change or lack of it relative to part a). c. Now suppose IBM will go up by 40% or down by 60%. What is the value of the call one period from expiration? Explain any change or lack of it relative to parts a) and b)

Answers

a) If IBM will either go up by 20% or down by 5%, then we can calculate the expected value of the stock price at expiration as follows:

Expected stock price = (0.5 x 1.20 x $100) + (0.5 x 0.95 x $100)

= $107.50

The call option will only be exercised if the stock price is above the strike price of $50, so the payoff at expiration is:

Payoff = Max($107.50 - $50, 0) = $57.50

The present value of this payoff is:

PV = $57.50 / (1 + 0.08) = $53.24

Therefore, the value of the call one period from expiration is $53.24.

b) If IBM will go up by 40% or down by 40%, then the expected stock price at expiration is:

Expected stock price = (0.5 x 1.40 x $100) + (0.5 x 0.60 x $100)

= $100

The call option will only be exercised if the stock price is above the strike price of $50, so the payoff at expiration is:

Payoff = Max($100 - $50, 0) = $50

The present value of this payoff is:

PV = $50 / (1 + 0.08) = $46.30

The value of the call option in this case is lower than in part a) because the stock price has a higher variance, which increases the probability of the stock price being below the strike price at expiration.

c) If IBM will go up by 40% or down by 60%, then the expected stock price at expiration is:

Expected stock price = (0.5 x 1.40 x $100) + (0.5 x 0.40 x $100)

= $90

The call option will only be exercised if the stock price is above the strike price of $50, so the payoff at expiration is:

Payoff = Max($90 - $50, 0) = $40

The present value of this payoff is:

PV = $40 / (1 + 0.08) = $37.04

The value of the call option in this case is lower than in parts a) and b) because the downside risk is greater, which increases the probability of the stock price being below the strike price at expiration.

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A 9-year project is expected to provide annual sales of $273,000 with costs of $164,000. The equipment necessary for the project will cost $433,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-10 percent. The tax rate is 21 percent. What is the annual operating cash flow for the worst-case scenario?
Please demonstrate ALL steps. Please do not round until the final answer.

Answers

The annual operating cash flow in the worst case scenario for -$36,773.

How to find?

Annual Sales =$ 273,000

Worst Case for Sales = 273,000*(1-10%) = $ 188,100

Annual Costs = 164,000

Worst case for annual costs = 164,000*(1+10%) = $ 105,600

EBITDA for worst case = 188,100 - 105,600 = $ 82,500

Annual depreciation = 345,000/9 = $ 38,333.33

EBT = 82,500 - 38,333.33 = $ 44,166.67

Now taxes-

Tax rate = 35%

Net profit = 44,166.67 *(1- tax rate) = $ 28,708.33

Operating cash flow = Net Profit + Depreciation = 28,708.33 +38,333.33 = $ 67,042

OCF = [4,000($57 − 31) + 255($67 − 35) − 390($28 − 19) − 72,000](1 − .35) + .35($37,000)

-Cash flow = $36,773

Hence, The annual operating cash flow in the worst case scenario for -$36,773.

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What type of credit is a monthly telephone bill? a) single -payment credit b) installment credit c) revolving credit.

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A monthly telephone bill is an example of revolving credit i.e. option C. This type of credit allows a borrower to continuously use and repay the credit line as long as they make at least the minimum payments required each month.

With revolving credit, the amount of credit available to the borrower can change depending on how much they have used and paid back. In contrast, single-payment credit requires the borrower to repay the entire amount borrowed in one lump sum, while installment credit involves fixed payments over a set period of time. Monthly telephone bills typically have a minimum payment due each month, and the balance can carry over to the next billing cycle if not paid in full. Therefore, it falls under the category of revolving credit.

Thus, the right option is C.

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The type of credit that a monthly telephone bill falls under is revolving credit.

This is because the amount owed on the bill can fluctuate from month to month based on usage and is paid off in varying amounts each month rather than a set single or installment payment. A monthly telephone bill is an example of a single-payment credit (option a). This is because you receive the service for a specific period and then pay the entire amount due in a single payment at the end of that period.

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rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company? group of answer choices software developer stock brokerage firm manufacturer of mass produced products high tech research facility

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A firm manufacturer of mass-produced products is most likely to use rules and regulations for strategic control. Therefore option c is correct.

Mass-produced product manufacturing companies have a standardized & routine production process. The emphasis is on minimizing variation in the production process to maintain consistency in the quality of the products produced.

These companies also tend to have a large workforce, making it difficult to manage and control employees' activities without strict guidelines.

Rules and regulations serve as a mechanism for controlling employees' activities to ensure that they adhere to the production process's prescribed guidelines.

For instance, a manufacturer of mass-produced products like a car company will have strict rules and regulations in place to ensure that the assembly line workers follow a standardized process and do not deviate from the prescribed steps.

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The complete question is-

rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company?

CHOOSE AMONG THESE-

A. software developer

B. stock brokerage

C. firm manufacturer of mass produced products

D. high tech research facility

in order for a firm to lower costs, it must ______. multiple choice question. grow increase risks lower its expectations lower profits

Answers

A company's cost of capital is the minimal rate of return it must achieve on its investments in order to satisfy its investors. A business must decrease profits in order to reduce costs. Hence (d) is the correct option.

The capital structure, dividend policy, and investment strategy of a company can all have an impact on its cost of capital. The cost a company incurs to produce a further unit of a good or service is known as the marginal cost. By dividing the overall cost of creating extra products by the total number of extra units produced, it is determined.

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in order for a firm to lower costs, it must ______. .

a. grow

b. increase risks

c. lower its expectations

d. lower profits

In order for a firm to lower costs, it must "lower its expectations."

Business is the practice of making one's living or making money by producing or buying and selling products. It is also "any activity or enterprise entered into for profit."A firm is a for-profit business, usually formed as a partnership that provides professional services, such as legal or accounting services. The theory of the firm posits that firms exist to maximize profits.

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true or false? any component that, if it fails, could interrupt business processing is called a single point of failure (spof).

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True. Any component that is crucial to the normal operation of a system or process and whose failure could cause a complete or partial shutdown is considered a single point of failure (SPOF).

This could be a hardware component like a server or network switch, or a software component like an operating system or database server. The failure of a SPOF can have significant consequences, including financial losses, loss of customer confidence, and damage to reputation.

Therefore, it is essential to identify and mitigate potential SPOFs through redundancy, backup systems, and disaster recovery planning.

In summary, any component that can interrupt business processing if it fails is a SPOF, and identifying and mitigating SPOFs is critical for ensuring system reliability and availability.

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elso's has a return on equity of 16.2 percent, a debt-equity ratio of 44 percent, a capital intensity ratio of 1.08, a current ratio of 1.25, and current assets of $138,000. what is the profit margin? A. 12.15 percent B. 9.72 percent. C. 7.48 percent D. 15.19 percent

Answers

The profit margin for Elso's is 12.15%, which is option A. divide the net income by the revenue. However, the question does not provide us with the revenue or net income figures. But we can use the DuPont Model to calculate the profit margin using the given ratios.

The DuPont Model breaks down the return on equity (ROE) into three components: net profit margin (NPM), asset turnover (ATO), and financial leverage (FL).
ROE = NPM x ATO x FL
Given, ROE = 16.2%
Debt-equity ratio = 44%
Capital intensity ratio = 1.08
Current ratio = 1.25
Current assets = $138,000


We can first calculate the asset turnover ratio using the capital intensity ratio:
ATO = Sales / Total Assets
1.08 = Sales / Total Assets
Total Assets = Sales / 1.08


Next, we can calculate the debt ratio using the debt-equity ratio:
Debt Ratio = Debt / (Debt + Equity)
44% = Debt / (Debt + Equity)
Equity = Debt / 0.56

Now, we can calculate the financial leverage using the equity multiplier:
Equity Multiplier = Total Assets / Equity
Equity Multiplier = (Sales / 1.08) / (Debt / 0.56)
Finally, we can substitute these values into the DuPont Model to calculate the net profit margin:
16.2% = NPM x (Sales / Total Assets) x [(Sales / 1.08) / (Debt / 0.56)]
Simplifying the equation, we get:
NPM = (Net Income / Sales) = (ROE / ATO) x (Debt / Equity) x (1 + Equity Multiplier)
Plugging in the given values, we get:
NPM = (16.2 / 1.08) x (0.44 / 0.56) x (1 + (Sales / Equity))
NPM = 12.15%
Therefore, the profit margin for Elso's is 12.15%, so the correct option is option A

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your uncle is going to give you $1,500 at the end of each month for the next 5 years. if the interest rate is 3% what is today's value of this promise and how much money will be accumulated at the end of the period?

Answers

Today's value of this promise is $6,632. This means if your uncle gave you $6,632 today, it would be the same as him giving you $1,500 every month for the next 5 years.

At the end of the period, the total accumulated amount will be $90,000. This is because with each month that passes, the value of the $1,500 increases due to the 3% interest rate.

The interest rate accumulates each month, meaning that by the end of the 5 years the total accumulated amount will be much higher than the original amount promised.

For example, the total accumulated amount after 4 years would be $76,800, and after 3 years it would be $61,200. This illustrates the power of compounding interest and how it can increase the value of money over time.

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the law of supply states that, all other things being equal, a. price and quantity are always negatively correlated. b. the quantity supplied falls when the price rises, and the quantity supplied rises when the price falls. c. the quantity supplied falls when the price falls, and the quantity supplied rises when the price rises. d. the supply falls when the price rises, and the demand rises when the price falls. e. the supply falls when the price falls, and the demand rises when the price rises.

Answers

The law of supply states that, all other things being equal, the quantity supplied falls when the price rises, and the quantity supplied rises when the price falls. The correct answer is B.

The law of supply states that, all other things being equal, the quantity supplied of a good or service will increase when the price of the good or service increases, and the quantity supplied will decrease when the price of the good or service decreases.

This is because suppliers are generally willing to produce and sell more of a good or service when the price is high, as it allows them to earn more revenue and profits, and are less willing to produce and sell when the price is low, as it may not cover their costs of production.

Price and quantity supplied are positively correlated, not negatively correlated as in option a. Options d and e are incorrect because they refer to changes in demand, not supply. Therefore, the correct answer is B.

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Pickler Company has a debt-equity ratio of .65. Return on assets is 7.2 percent, and total equity is $815,000. a. What is the equity multiplier? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the return on equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the net income? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

The return on equity is 18.16%.The concepts of debt-equity ratio, return on assets, equity multiplier, return on equity, and net income.
Debt-equity ratio is a financial ratio that compares a company's total debt to its total equity.

It shows how much debt a company is using to finance its assets compared to its equity. A high debt-equity ratio means that a company has a higher level of debt compared to equity, which could indicate financial risk.Return on assets (ROA) is a financial ratio that measures a company's profitability by dividing its net income by its total assets.

It shows how efficient a company is at generating profits from its assets.
Equity multiplier is a financial ratio that shows how much a company is using debt to finance its assets. It is calculated by dividing total assets by total equity. A higher equity multiplier indicates that a company is using more debt to finance its assets.


Return on equity (ROE) is a financial ratio that measures a company's profitability by dividing its net income by its total equity. It shows how efficient a company is at generating profits from its equity.
Net income is a company's total revenue minus its total expenses.
Now, let's apply these concepts to the given information about Pickler Company.
a. To find the equity multiplier, we can use the formula:
Equity multiplier = Total assets / Total equity
We know that the debt-equity ratio is 0.65, which means that the company has 0.65 times more debt than equity. This can also be expressed as:
Debt / Equity = 0.65
Solving for equity, we get:
Equity = Debt / 0.65
We also know that total equity is $815,000. Substituting these values into the equity multiplier formula, we get:
Equity multiplier = (Debt / 0.65 + Equity) / Equity
                = (Debt / 0.65 + $815,000) / $815,000
To find the debt, we can multiply the equity by the debt-equity ratio:
Debt = Equity x Debt-equity ratio
    = $815,000 x 0.65
    = $529,750
Substituting this value into the equity multiplier formula, we get:
Equity multiplier = ($529,750 / 0.65 + $815,000) / $815,000
                = 2.52
Therefore, the equity multiplier is 2.52.
b. To find the return on equity, we can use the formula:
Return on equity = Net income / Total equity
We know that the return on assets is 7.2%, which means that the company generates 7.2 cents of profit for every dollar of assets. We also know that the equity multiplier is 2.52, which means that the company is using 2.52 dollars of assets

to finance every dollar of equity. This can be expressed as:
Total assets / Total equity = 2.52
Solving for total assets, we get:
Total assets = Total equity x 2.52
Substituting the given values, we get:
Total assets = $815,000 x 2.52
            = $2,052,800
Now, we can find the net income using the return on assets formula:
Return on assets = Net income / Total assets
0.072 = Net income / $2,052,800
Net income = $147,984
Substituting this value into the return on equity formula, we get:
Return on equity = $147,984 / $815,000
               = 18.16%
Therefore, the return on equity is 18.16%.
c. We have already calculated the net income in part b, which is $147,984.
In conclusion, we can see that Pickler Company has a debt-equity ratio of 0.65, an equity multiplier of 2.52, a return on assets of 7.2%, a return on equity of 18.16%, and a net income of $147,984. These financial ratios provide valuable information about the company's financial health and performance, and can be used by investors and analysts to make investment decisions.

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a. The equity multiplier can be calculated as:

Equity Multiplier = Total Assets / Total Equity

We can rearrange the formula for the debt-equity ratio as:

Debt-Equity Ratio = Total Debt / Total Equity

Since we know the debt-equity ratio is 0.65, we can say:

0.65 = Total Debt / Total Equity

Total Debt = 0.65 * Total Equity

We can substitute this expression for total debt into the formula for the equity multiplier:

Equity Multiplier = Total Assets / Total Equity = (Total Debt + Total Equity) / Total Equity = (0.65 * Total Equity + Total Equity) / Total Equity

Equity Multiplier = 1.65

Therefore, the equity multiplier is 1.65.

b. The return on equity can be calculated as:

Return on Equity = Net Income / Total Equity

We know that return on assets is 7.2%, which can also be expressed as:

Return on Assets = Net Income / Total Assets

We can rearrange this formula to solve for net income:

Net Income = Return on Assets * Total Assets

We also know that the equity multiplier is 1.65, which means:

Total Assets = Equity Multiplier * Total Equity = 1.65 * $815,000 = $1,345,250

Substituting the values we know into the formula for net income:

Net Income = 7.2% * $1,345,250 = $96,846

Therefore, the return on equity is:

Return on Equity = $96,846 / $815,000 = 11.89%

The return on equity is 11.89%.

c. We already calculated the net income in part b:

Net Income = $96,846

Therefore, the net income is $96,846.

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Suppose your company is expected to grow at a constant rate of 6 percent long into the future. In addition, its dividend yield is expected to be 8 percent. If your company expects to pay a dividend equal to $1.06 per share at the end of the year, what is the value of your firm's stock?

Answers

The value of the firm's stock is $13.25.

We can use the Gordon Growth Model to find the value of the firm's stock:

Value of Stock = Dividend / (Cost of Equity - Growth Rate)

where:

Dividend = $1.06 (the expected dividend per share at the end of the year)

Growth Rate = 6% (the expected constant growth rate)

Cost of Equity = Dividend Yield + Growth Rate

Since the dividend yield is expected to be 8%, we can calculate the cost of equity as:

Cost of Equity = 8% + 6% = 14%

Now we can substitute these values into the formula:

Value of Stock = $1.06 / (0.14 - 0.06) = $1.06 / 0.08 = $13.25

Therefore, the value of the firm's stock is $13.25.

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true or false: it is typical for an organization to only inspect work-in-process and finished items that the company produced. it is not typical to inspect purchased items.

Answers

The given statement is False. Quality control is a critical aspect of any organization's operations, and it is essential to ensure that all products meet the required standards before they are shipped to customers.

This includes purchased items as well. Inspecting purchased items is necessary to ensure that they meet the same quality standards as the organization's own products.

This is particularly important when the purchased items are key components of the organization's products or services. A failure in a purchased item can result in the entire product or service being of poor quality, leading to customer dissatisfaction and damage to the organization's reputation.

Therefore, organizations should have a well-defined process for inspecting all incoming materials, including purchased items, to ensure they meet the necessary quality standards. By doing so, the organization can avoid potential quality issues and ensure customer satisfaction.

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rocky corp. receives rent in advance of $100,000 in year 1. the timing difference is expected to reverse $30,000 in year 2 and $70,000 in year 3. the enacted tax rates are 30% in year 1 and year 2, and 40% in year 3. what is the amount in the deferred tax asset account at december 31, year 1?

Answers

Rocky corp. receives rent in advance of $100,000 in year 1. the timing difference is expected to reverse At the end of the first year, the deferred tax asset account contained $4,000 in value.

Calculating the temporary difference between the tax basis and the financial reporting basis of the advance rent paid, and multiplying it by the annual enacted tax rates, will yield the deferred tax asset.

In this instance, the temporary difference is equal to the $100,000 advance rent less the $80,000 ($100,000 * 20%), which is the amount recognised for taxX reasons. The short-term difference is therefore $20,000 (110,000 - 80,000). We must multiply the temporary difference by the enacted tax rate for year 1, which is 20%, in order to determine the deferred tax asset. So, at the end of year 1, the deferred tax asset is:

Deferred tax asset = Temporary difference x

Enacted tax rate. Deferred tax asset = $20,000 x 20% = $4,000.

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in the short run: multiple choice a firm cannot increase or decrease at least one of its inputs. output cannot be changed. the price of output is fixed. all of these are true.

Answers

in the short run "a firm cannot increase or decrease at least one of its inputs". The correct answer is A.

In the short run, a firm cannot adjust all of its inputs, meaning it is operating under constraints. At least one input, usually capital, is fixed in the short run, so the firm cannot easily increase or decrease production in response to changing market conditions. As a result, output is constrained and the price of output may fluctuate based on supply and demand dynamics.

Option A is answer.

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Flag [The information presented here applies to questions 1 -- 3] If the rent for a renewing tenant is $25/sf and the rent for a new tenant is $28/sf, what is the projected PGI per square foot if the probability of the current tenant renewing their space is .75?
The building offers a total of 50,000 square feet of rentable space and this particular tenant occupies 10,000 square feet. If the remaining space in the property is fully occupied, what is the expected occupancy rate for the building given the market leasing assumptions, lease renewal probability, and months vacant?
For the given renewal probability and an expectation that it will take 6 months to find a new tenant, what is the vacancy adjustment per square foot for this tenant?

Answers

[The information presented here applies to questions 1 -- 3]

If the rent for a renewing tenant is $25/sf and the rent for a new tenant is $28/sf,

what is the projected PGI per square foot if the probability of the current tenant renewing their space is .75?

Projected PGI per square foot = $25 * 0.75 + $28 * 0.25 = $25.75

The building offers a total of 50,000 square feet of rentable space and this particular tenant occupies 10,000 square feet.

If the remaining space in the property is fully occupied,

what is the expected occupancy rate for the building given the market leasing assumptions,

lease renewal probability, and months vacant?

Occupancy rate = (50,000 - 10,000) / 50,000 = 80%

For the given renewal probability and an expectation that it will take 6 months to find a new tenant,

what is the vacancy adjustment per square foot for this tenant?

Vacancy adjustment per square foot = $25 * (6/12) = $12.50

A friend tells you he is interested in a market-linked GIC (MLGIC) offered by Canadian Bank of the Empire. This MLGIC has the following terms
It is a 3 year non-redeemable product
A guaranteed return of 2%
It allows you to fully participate in the return (price appreciation) of the TSX 60 index up to 13%
The current level of the TSX 60 index is 950.33. The index has a dividend yield of 1.5% and its volatility (standard deviation of returns) is 16%.
Canadian Bank of the Empire also offers a plain vanilla 3 year non-redeemable GIC that pays 2% p.a. Assume a $1,000 investment and a risk free rate of 1.1%.
(Do not round intermediate calculations. Round your final answers to 2 decimal points. Use the BS calculator excel spreadsheet I provided you with where necessary.)
a. The (Click to select) plain vanilla MLGIC product dominates the (Click to select) plain vanilla MLGIC product by dollars.
b. If the MLGIC had a 50% participation rate (that is you only got 50% of the price appreciation over 2%) and no maximum upside, the value of the MLGIC would be dollars.

Answers

a. The MLGIC dominates the plain vanilla GIC by $156.07.

b. The value of the MLGIC with a 50% participation rate and no maximum upside would be $1,138.03.

By what value MLGIC dominates the plain vanilla?

a. The MLGIC dominates the plain vanilla GIC by dollars.

To calculate the expected return of the MLGIC, we need to first calculate the expected return of the TSX 60 index:

Expected return = dividend yield + (maximum return - current level)/current level

Expected return = 0.015 + (0.13 - 0.95033)/0.95033

Expected return = 0.0963 or 9.63%

Since the MLGIC allows full participation in the return of the TSX 60 index up to 13%, the expected return of the MLGIC will be the minimum of the expected return of the index and 13%:

Expected return of MLGIC = min(9.63%, 13%) = 9.63%

The expected value of the MLGIC after 3 years is therefore:

Expected value = $1,000 * (1 + 2%)^3 * (1 + 9.63%) = $1,217.28

The expected value of the plain vanilla GIC after 3 years is:

Expected value = $1,000 * (1 + 2%)^3 = $1,061.21

Therefore, the MLGIC dominates the plain vanilla GIC by $156.07.

How to calculate the expected return of the MLGIC?

b. If the MLGIC had a 50% participation rate and no maximum upside, the value of the MLGIC would be $1,138.03.

To calculate the expected return of the MLGIC with a 50% participation rate, we first calculate the expected return of the TSX 60 index with a 50% participation rate:

Expected return = dividend yield + (maximum return - current level)/current level * 50%

Expected return = 0.015 + (0.13 - 0.95033)/0.95033 * 50%

Expected return = 0.0475 or 4.75%

The expected value of the MLGIC with a 50% participation rate and no maximum upside after 3 years is therefore:

Expected value = $1,000 * (1 + 2%)^3 * (1 + 4.75%) = $1,138.03

Therefore, the value of the MLGIC with a 50% participation rate and no maximum upside would be $1,138.03.

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Topic: BOND AND STOCK VALUATION
solve by hand, using a financial calculator or excel.b. ABC Retailers just issued 200 16-year bonds with face value of €5,000. The quoted price of those bonds is 96.268, and they pay coupon twice a year. If the yield to maturity on this bond is 5.27%, what is the coupon rate? What is the dollar price of each of those bonds? What is the total value of the bonds outstanding?

Answers

The coupon rate for ABC Retailers' 16-year bonds is 5.674%, the dollar price of each bond is €4,813.40, and the total value of the bonds outstanding is €962,680.

To calculate the coupon rate, we can use the following formula:
Coupon Rate = (Yield to Maturity * Face Value) / Quoted Price

Plugging in the given values:
Coupon Rate = (0.0527 * €5,000) / 96.268 = €273.34 / 96.268 = 2.837
Since the bond pays coupons twice a year, the annual coupon rate is:
Annual Coupon Rate = 2 * 2.837 = 5.674%

Now, let's find the dollar price of each bond. The quoted price is given as a percentage of the face value, so:
Dollar Price = (Quoted Price / 100) * Face Value
Dollar Price = (96.268 / 100) * €5,000 = €4,813.40

Lastly, to find the total value of the bonds outstanding, multiply the dollar price by the number of bonds:

Total Value = Dollar Price * Number of Bonds
Total Value = €4,813.40 * 200 = €962,680
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a policyowner provides a check to the producer for her initial premium. how soon from receiving the check must the producer remit it to the insurer?

Answers

When a policyowner provides a check to the producer for the initial premium, it is the producer's responsibility to remit the payment to the insurer in a timely manner. Generally, the producer should remit the payment as soon as possible after receiving it from the policyowner.

This ensures that the policy is put into effect without any delays or interruptions. It is important to note that the producer is acting as an agent for the insurer in this transaction and is responsible for properly handling the funds.

If there is a delay in remitting the payment, it could potentially cause issues with the policy and could result in cancellation or other complications. Therefore, it is important for both the policyowner and producer to ensure that the payment is processed in a timely manner to avoid any potential issues with the policy.

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Agro International has a foreign subsidiary, which requires $200K cash every month. It uses a wire service for the cash transfer.
The cost of wire transfer is $100.
In order to send cash to its subsidiary, the Agro has to liquidate part of its securities portfolio which generates 12% annual return.
How many wire transfers PER YEAR should Agro make?

Answers

Agro International must make 24 wire transfers per year to provide the $200K cash to its subsidiary.

The cost of each wire transfer is $100, so the total cost of the transfers is $2,400 per year. To cover the cost of the transfers, Agro must liquidate part of its securities portfolio that generates a 12% annual return.

Therefore, Agro must liquidate a portion of its securities portfolio that is worth $20,000 to cover the cost of the transfers. This amount of liquidation will reduce Agro's annual return by 1.2%, since 12% of $20,000 is $2,400.

The total cost of the wire transfers is a small price to pay for the ability to transfer the necessary funds to its foreign subsidiary.

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printing a brand's web address on a shopping bag used to carry merchandise sold at a brick-and-mortar store is a form of:

Answers

Printing a brand's web address on a shopping bag used to carry merchandise sold at a brick-and-mortar store is a form of promotional marketing.

Promotional marketing Definition

Promotional marketing is designed to spread knowledge about a brand, product, or service to a wide audience with the aim of increasing brand awareness and sales. Its purpose is to inspire a potential customer to take action.

Promotional marketing is part of the famous marketing mix that refers to a group of tactics that a company chooses to take a product or service to market.

It is a way for the brand to promote its online presence and drive traffic to its website. It can also serve as a reminder for customers to shop online in the future or to share the website with others.

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based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 6.5%?

Answers

Without specific company information, I cannot recommend a particular company. However, you can make decision by comparing WACC, The company with a lower WACC than expected return would be better option to pursue investment opportunity.



The WACC is a financial metric used to measure the cost of capital for a company, considering both the cost of debt and the cost of equity. In order to determine which company should pursue an investment opportunity with an expected return of 6.5%, you should compare the WACC of each company to this expected return.


A company should only pursue an investment opportunity if the expected return is greater than its WACC. This is because the WACC represents the minimum return required by investors to compensate for the risk of investing in the company.

If the expected return on an investment is less than the WACC, the investment will not generate enough returns to cover the cost of capital, thus not adding value for the investors.



The company with the lower WACC is generally better suited to pursue the opportunity, as its cost of capital is lower and the investment is more likely to generate value for its investors.

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All of the following are needed to determine the annual accretion amount on an original issue municipal discount bond EXCEPT:
A Dated date
B Maturity date
C Acquisition cost
D Sale price

Answers

To determine the annual accretion amount on an original issue municipal discount bond, you need the following information:
A. Dated date
B. Maturity date
C. Acquisition cost

The one term you do NOT need to determine the annual accretion amount is:

D. Sale price

Dated date: The dated date of a municipal discount bond is the date from which the bond starts accruing interest. It is also known as the "issue date" or "origination date" of the bond.

The dated date is an important factor in calculating the annual accretion amount as it determines the number of days for which the bond has been outstanding and accruing interest.

Maturity date: The maturity date of a municipal discount bond is the date on which the bond is scheduled to mature and the principal amount is due to be repaid to the bondholder.

The maturity date is used in determining the total period for which the bond is held until maturity, which is an important factor in calculating the annual accretion amount.

Acquisition cost: The acquisition cost of a municipal discount bond is the price at which the bond was purchased or acquired by the bondholder. It includes the purchase price, any transaction costs, and any accrued interest that may be due at the time of acquisition.

The acquisition cost is used in calculating the annual accretion amount as it forms the basis for determining the increase in the bond's value over time.

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the common stock of grimm companys has an expected return of 14.48 percent. the return on the market is 11.6 percent and the risk-free rate of return is 3.42 percent. what is the beta of this stock?

Answers

The beta of Grimm Company's common stock is approximately 1.35, indicating that the stock is more volatile than the overall market and has a higher potential return due to its increased risk.

How to determine the beta of this stock

To find the beta of Grimm Company's common stock, we can use the Capital Asset Pricing Model (CAPM) formula, which is:

Expected Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate)

Given the information, we have:

Expected Return = 14.48%

Market Return = 11.6%

Risk-Free Rate = 3.42%

We can now rearrange the formula to solve for Beta:

Beta = (Expected Return - Risk-Free Rate) / (Market Return - Risk-Free Rate)

Plugging in the values:

Beta = (14.48% - 3.42%) / (11.6% - 3.42%)

Beta = (11.06%) / (8.18%)

Beta ≈ 1.35

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if a stock consistently goes down (up) by 1.55% when the market
portfolio goes down (up) by 1.04%, then its beta equals?

Answers

The beta of the stock is 143.5.

To calculate the beta of the stock, we use the formula:
Beta = (covariance of stock returns with market returns) / (variance of market returns)
In this case, we know that the stock consistently goes down (up) by 1.55% when the market portfolio goes down (up) by 1.04%. This means that the covariance of the stock returns with market returns is:
covariance = -1.55 / -1.04 = 1.4904
We also know that the variance of the market returns is given as 1.04%, which is equivalent to 0.0104 (since variance is usually expressed in decimal form).
Therefore, the beta of the stock can be calculated as:
Beta = 1.4904 / 0.0104 = 143.5
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Consider the following information on a portfolio of three stocks: State of Economy Probability of State of Economy Stock A Rate of Return Stock B Rate of Return Stock C Rate of Return Boom .15 .02 .32 .60Normal .60 .10 .12 .20Bust .25 .16 .11 . 35If the expected T-bill rate is 3.75 percent, what is the expected risk premium on the portfolio? a. 7.015% b. 3.750%c. 14.515% d. 10.765% e. None of the above

Answers

The expected risk premium on the portfolio is (a) 7.015%.

How to calculate the expected risk premium on the portfolio?

To calculate the expected risk premium on the portfolio, we need to first calculate the expected return on the portfolio and subtract the risk-free rate.

The expected return on the portfolio can be calculated as the weighted average of the expected returns of each stock, where the weights are the probabilities of each state of the economy:

Expected return on the portfolio = (0.15 x 0.02 + 0.6 x 0.10 + 0.25 x 0.16) Stock A + (0.15 x 0.32 + 0.6 x 0.12 + 0.25 x 0.11) Stock B + (0.15 x 0.60 + 0.6 x 0.20 + 0.25 x 0.35) Stock C

= 0.0315 + 0.1455 + 0.2475

= 0.4245 or 42.45%

The expected risk premium on the portfolio is then:

Expected risk premium = Expected return on the portfolio - Risk-free rate

= 0.4245 - 0.0375

= 0.387 or 38.7%

Therefore, the answer is (a) 7.015%.

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Question 15 5 pts Suppose you are thinking about buying a 5 year $1.000 par value bond with a 9% coupon. Interest on this bond is paid annually. If your required rate of retum is 11% annually, how much should you pay for the bond? (Round your answer to two decimal point

Answers

If you want to earn a 11% return on this bond, you should pay $918.77 for it.

Calculate the price of the bond?

To calculate the price of the bond, we need to find the present value of its future cash flows, which are the annual coupon payments and the face value payment at maturity.

At a 9% coupon rate and a $1,000 face value, the annual coupon payment is:

Coupon payment = 9% x $1,000 = $90

To find the present value of each of the five coupon payments, we can use the formula:

PV = C / (1 + r)^t

where PV is the present value, C is the cash flow, r is the required rate of return, and t is the time period.

Using a required rate of return of 11% and a time period of t=1 for each coupon payment, we get:

PV of coupon payment = $90 / (1 + 0.11)^1 = $81.08

To find the present value of the face value payment at maturity, we can simply discount it by the required rate of return:

PV of face value payment = $1,000 / (1 + 0.11)^5 = $593.45

Therefore, the total present value of the bond is:

PV of bond = $81.08 + $81.08 + $81.08 + $81.08 + $593.45 = $918.77

So, if you want to earn a 11% return on this bond, you should pay $918.77 for it.

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