An investor purchased the following five bonds. Each bond had a par value of $1,000 and a 11% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 5%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers to the nearest cent and percentage answers to two decimal places.
| Price @ 11% | Price @ 5% | Percentage Change | |
| 10-year, 10% annual coupon | $ | $ | % |
| 10-year zero | |||
| 5-year zero | |||
| 30-year zero | |||
| $100 perpetuity |
In: Finance
In: Statistics and Probability
Two types of intercompany stock purchases significantly complicate the consolidation process. The first occurs when the subsidiary issues added shares of stock in a public issue and the parent buys a portion of the shares. The second occurs when the subsidiary purchases outstanding shares of the parent company. Required: A- Discuss the current theoretical consolidation procedure for situations in which the parent buys a portion of the newly issued subsidiary shares that is (1) equal to its existing ownership percentage, (2) greater than its existing ownership percentage, and (3) less than its existing ownership percentage. B- Discuss the most widely supported, current theoretical consolidation procedures used when the subsidiary purchases outstanding common stock shares of the parent.
In: Accounting
A) Body mass index (BMI) in children is approximately normally distributed with a mean of 24.5 and a standard deviation of 6.2. A BMI between 25 and 30 is considered overweight. What proportion of children are overweight? (Hint: p[25<x<30]. Answer in 0.0000 format, NOT in percentage format. Round to 4 decimal places)
B) If BMI larger than 30 is considered obese, what proportion of children are obese? (Answer in 0.0000 format, NOT in percentage format. Round to 4 decimal places).
C)Based on information provided in Question 42, in a random sample of 10 children, what is the probability that their mean BMI exceeds 25? (Hint: Central Limit Theorem. Answer in 0.0000 format, NOT in percentage format. Round to 4 decimal places)
In: Math
A researcher conducts a study of white and black attitudes toward the police in her community.
The percentage of a random sample of white respondents (N = 200) who say they have a favorable attitude toward the police is 53%. The percentage of a random sample of black respondents (N = 200) who say they have a favorable attitude toward the police is 45%.
You are asked if there is a real difference between the percentage of whites and blacks who have a positive attitude toward the police in the larger population, or is this sample difference likely to have occurred by random chance or sampling error.
How do you respond? Explain your answer.
Construct a 95% confidence interval for the proportion of Blacks in the population who have a favorable attitude toward the police
In: Math
|
Organic food products |
Beverages |
|||
|
Price $ |
Quantity (tons) |
Price $ |
Quantity (tons) |
|
|
2015 |
5 |
3 |
1 |
20 |
|
2016 |
6 |
4 |
2 |
30 |
|
2017 |
8 |
5 |
3 |
40 |
Use the following information about an economy that produces only two types of products, organic food products and beverages. Calculate the following for the years 2015, 2016 and 2017, unless otherwise requested:
change in GDP deflator)
change in GDP deflator)
In: Economics



Your company plans to issue bonds later in the upcoming year. But with the economic uncertainty and varied interest rates, it is not clear how much money the company will receive when the bonds are issued. The company is committed to issuing 2,400 bonds, each of which will have a face value of $1,000, a stated interest rate of 10 percent paid annually, and a period to maturity of 10 years. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided.)
Required:
.1. Compute the bond issue proceeds assuming a market interest rate of 10 percent. (When computing proceeds, round the present value of the face amount and of the annual interest payment to the nearest thousand dollars.) Also, express the bond issue price as a percentage by comparing the total proceeds to the total face value. (Round "Bond Issue Price as a Percentage" to 2 decimal places. )
2. Compute the bond issue proceeds assuming a market interest rate of 9 percent. (When computing proceeds, round the present value of the face amount and of the annual interest payment to the nearest thousand dollars.) Also, express the bond issue price as a percentage by comparing the total proceeds to the total face value. (Round "Bond Issue Price as a Percentage" to 2 decimal places.)
3. Compute the bond issue proceeds assuming a market interest rate of 11 percent. (When computing proceeds, round the present value of the face amount and of the annual interest payment to the nearest thousand dollars.) Also, express the bond issue price as a percentage by comparing the total proceeds to the total face value. (Round "Bond Issue Price as a Percentage" to 2 decimal places.)
In: Accounting
Selected data from the financial statements of Italian Marble Co. and Brazil Stone Products for the year just ended follow. Assume that for both companies, dividends declared were equal in amount to net earnings during the year, and therefore stockholders' equity did not change. The two companies are in the same line of business.
| Italian Marble Co. | Brazil Stone Products | ||||||
| Total liabilities | $ | 200,000 | $ | 100,000 | |||
| Total assets | 800,000 | 400,000 | |||||
| Sales (all on credit) | 1,850,000 | 1,060,000 | |||||
| Average inventory | 240,000 | 140,000 | |||||
| Average receivables | 200,000 | 100,000 | |||||
| Gross profit as a percentage of sales | 40 | % | 30 | % | |||
| Operating expenses as a percentage of sales | 36 | % | 25 | % | |||
| Net income as a percentage of sales | 3 | % | 5 | % | |||
a. Compute the net income for each company.
b. Compute the net income as a percentage of stockholders' equity for each company.
c. Compute the accounts receivable turnover for each company.
d. Compute the inventory turnover for each company.
e. Which company is in a stronger financial position?
Compute the net income for each company.
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Compute the net income as a percentage of stockholders' equity for each company. (Round your answers to the nearest whole number.)
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Compute the accounts receivable turnover for each company. (Round your answers to the nearest whole number.)
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Compute the inventory turnover for each company. (Round your answers to 1 decimal place.)
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In: Accounting
Ghost, Inc., has no debt outstanding and a total market value of $200,000. Earnings before interest and taxes, EBIT, are projected to be $26,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 12 percent higher. If there is a recession, then EBIT will be 25 percent lower. The company is considering a $65,000 debt issue with an interest rate of 6 percent. The proceeds will be used to repurchase shares of stock. There are currently 10,000 shares outstanding. Ignore taxes for this problem.
a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
a-1.Recession EPS
Normal EPS
Expansion EPS
a-2.Recession percentage change in EPS%
Expansion percentage change in EPS%
b-1.Recession EPS
Normal EPS
b-2.Expansion EPS
Recession percentage change in EPS%
Expansion percentage change in EPS%
In: Finance
|
Ghost, Inc., has no debt outstanding and a total market value of $250,000. Earnings before interest and taxes, EBIT, are projected to be $40,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 percent higher. If there is a recession, then EBIT will be 20 percent lower. The company is considering a $105,000 debt issue with an interest rate of 4 percent. The proceeds will be used to repurchase shares of stock. There are currently 10,000 shares outstanding. Ignore taxes for this problem. |
| a-1. |
Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Find recession EPS, normal EPS, expansion EPS |
| a-2. |
Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Find Recession percentage change in
EPS |
| b-1. |
Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Find recession EPS, normal EPS, expansion EPS |
| b-2. |
Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Find Expansion EPS |
In: Finance