On January 14 2016, Nokia and Alcatel-Lucent celebrated their first day of combined operations. A couple of years earlier, Nokia and Microsoft formed a partnership, which did not work well.
Why did Nokia and Alcatel-Lucent merge? Is their merger likely to be successful? What was the impact on the stock price?
In: Finance
Assume that today is October 15th. It is known that a certain Treasury bond is the cheapest to deliver bond on the Treasury futures contract. The cheapest to deliver bond has a 5% coupon and the last coupon payment was on June 3rd. Today’s quoted price for the bond is $92. The first day that delivery can take place is December 20th. Assume that the term structure of interest rates is constant and the rate of interest (based on continuous compounding) is equal to 6%. If the conversion factor for the cheapest to deliver bond is 0.8, what is the Treasury futures price?
In: Finance
Suppose the demand equation facing a firm is Q = 1000 – 5P, MR = 200 – 0.4 Q, and MC = $20.
In: Economics
Suppose the demand equation facing a firm is Q = 1000 – 5P, MR = 200 – 0.4 Q, and MC = $20.
In: Economics
What are the impacts of the law of diminishing marginal utility gained as it applies to a recent purchase of a good or service?
Specifically, consider how your willingness-to-pay price was less for purchasing a second unit of a good or service based on getting less benefit from the second item you consume relative to the first?
Would you respond to purchasing the second unit if it was sold at a discounted price?
Do you seek to gain the same utility from all units you consume? (at least 175 words all together)
In: Economics
Over the next three years, a firm is expected to earn economic profits of $60,000 in the first year, $50,000 in the second year, and $20,000 in the third year. After the end of the third year, the firm will go out of business. a. If the risk-adjusted discount rate is 6 percent for each of the next three years, the value of the firm is $________. The firm can be sold today for a price of $________. b. If the risk-adjusted discount rate is 11 percent for each of the next three years, the value of the firm is $________. The firm can be sold today for a price of $________.
In: Finance
George enjoys drinking coffee everyday. The following utility function describes his preferences for daily coffee consumption: u(x) = min{5x,20}where x is the number of coffee drinks he has that day. Assume each drink costs 2. Which statement is incorrect?
(a) His reservation price for the first drink is 5.
(b) His reservation price for the fifth drink is 5.
(c) His willingness to pay for three drinks is 15.
(d) Consumer surplus is equal to 12
In: Economics
On September 1, 19X1, Simons Company sold and issued to Trammel Company $60,000, 5-year, 9% coupon annual interest rate (payable semiannually) bonds for a price that would yield the market annual rate of interest of 8%. The bonds were dated July 1, 19X1, and interest is payable each June 30 and December 31. The accounting period for Simons ends on December 31.
Required:
Calculate the cash price at September 1,and record the journal entries for issuance and for the first 2 interest periods.
In: Accounting
Two investors are evaluating Honewell’s common stock for possible purchase. They agree on the expected value of D1 and also on the expected future dividend growth rate. Further, they agree on the riskiness of the stock, and thus, the discount rate. Assume that the first investor would plan to sell the stock after 3 years and the 2nd investor would plan on selling the stock after 5 years. Would they agree on the price of the stock today, or would they disagree on the price because of the differences in the length of time that each plans to hold the stock? Clearly explain.
In: Finance
A real state agent wishes to determine if there is a significant difference in the selling prices of homes in two Seattle suburbs. She took a sample of 41 homes from the first suburbs and found the average selling price from was $261,225. The standard deviation of all homes in that suburb is $5,602. She took a sample of 61 homes from the second suburb and the average selling price was $259,102. The standard deviation of all homes in the second suburb is $4,731. We are testing a null hypothesis of against an alternative hypothesis of .
Find the value of the test statistic.
In: Statistics and Probability