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Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 8.5 percent, payable annually, and a par value of $1,000. The one-year interest rate is 8.5 percent. Next year, there is a 35 percent probability that interest rates will increase to 11 percent and a 65 percent probability that they will fall to 7 percent.
a. What will the market value of these bonds be if they are noncallable? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. If the company decides instead to make the bonds callable in one year, what coupon rate will be demanded by the bondholders for the bonds to sell at par? Assume that the bonds will be called if interest rates fall and that the call premium is equal to the annual coupon. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
c. What will be the value of the call provision to the company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
1) Please explain the importance of (1) correlation/covariance, (2) the efficient frontier and (3) the sharpe ratio in the context of evaluating multiple
You need to accumulate $91,234 for your son's education. You have decided to place equal year-end deposits in a savings account for the next 10 years.
Assume on a recent day, the January 2017 S&P Index futures contract (i.e., the S&P contract which expires in January of next year) closed at 2000, down 40 points on the day. The value of the contract is set at 250 × the index.
You want to submit a report regarding the changing customer needs and the changes in customer satisfaction to higher management.
c) Note that the starred observation in the data set is very different from the others. It is a potential outlier. Construct a box plot for these data to verify that the value 10.1 does, in fact, qualify as an outlier.
Compare the different types of financial markets securities and Evaluate the performance of financial institutions currently working in the market.
Explain how the use of the imagery in the poems expreses the passions that Neruda has for the subject in each work.
Calculating Annuity Future Values. You are to make monthly deposits of $500 into a retirement account that pays an APR of 9.8 percent compounded monthly.
Total asset turnover 3.1 Profit margin 6% Equity multiplier 1.5
calculate the required rate of return for management inc. assuming that investors expect a 5 rate of inflation in the
Assume net income for the coming year is p redicted to be $1,634 and dividends are forecasted to be $657. After careful analysis, you determine asset needs for next year are $48,824 and liabilities are expected to be $12,869.
Levin SdnBhd has fixed operating cost of RM72,000, variable cost of RM6.75 per unit, and selling price of RM9.75 per unit.
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