Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluation. The firm has a bond issue outstanding with 15 years to maturity and a coupon rate of 8 percent, with interest being paid semiannually. The required simple rate of return on this debt has now risen to 16 percent. What is the current value of this bond? (Round the answer to the nearest whole number.)?
A. ?$1,273
B. $1,000?
C. $7,783?
D. $550?
E. ?$450
Answer: D
You might also like to view...
Answer the following statements true (T) or false (F)
1. Endowment funds are invested in perpetuity. 2. Equipment is considered a fixed asset. 3. Accrual basis accounting records financial transactions even when the organization does not have sufficient cash flow. 4. A statement of financial position shows a snapshot of the organization’s assets and liabilities at a point in time. 5. Endowment management is governed by state law.
The courts are likely to provide remedies in all but which of the following cases?
a. A person refuses to return your friend's book. b. A stranger refuses to help rescue a drowning child. c. A person pushes a stranger into the lake. d. A driver maneuvers recklessly on a busy street.
An analyst is evaluating two companies, A and B. Company A has a debt ratio of 50% and
Company B has a debt ratio of 25%. In his report, the analyst is concerned about Company B's debt level, but not about Company A's debt level. Which of the following would best explain this position? A) Company B has much higher operating income than Company A. B) Company B has more total assets than Company A. C) Company A has a lower times interest earned ratio and thus the analyst is not worried about the amount of debt. D) Company B has a higher operating return on assets than Company A, but Company A has a higher return on equity than Company B.
Greg, a salesperson for Home Improvement Center, tells Irena, "This is the best floor sander I've ever seen." This statement is
A) an express warranty B) an implied warranty. C) a warranty of title. D) puffery.