Suppose the actual cost to hedge this warrant exposure were $200 million. Calculate Roche's effective interest cost from using the Bull Spread issue
What will be an ideal response?
Fully hedged, Roche would start (i.e., in Year 0, 1991) with $800 million rather than $679.12 million. Therefore, Roche would pay the 4% coupon each year and, at maturity, it would repay the principal and interest of $1,040 million. As a result, its cost of funds (as calculated by the internal rate of return) would be 6.8%.
You might also like to view...
When is a criminal said to be judgment proof?
A. when the criminal has not been read his Fifth Amendment rights prior to his arrest B. when the criminal does not have the money to pay a civil judgment C. when the criminal is found to be unfit to go to prison D. when the criminal has been deemed to be insane
Drop shippers
A. own the merchandise they sell but do not physically handle, stock, or deliver it. B. have a small warehouse from which they stock their trucks for distribution to retailers. C. take title to merchandise but sell only to buyers who call on them, pay cash for merchandise, and furnish their own transportation for merchandise. D. perform all channel functions, and sell on consignment to retailers. E. work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory.
Managers need to ________ so that employees will discuss problems in meeting goals, rather than resorting to unethical and possibly illegal behavior.
A. keep the lines of communication open B. maintain accurate records of employee performance results C. incentivize employees to achieve goals at all costs D. penalize employees for failure to achieve goals E. lavishly reward high achievers
A sample of 196 bags of sugar produced by Domain sugar producers showed an average of 2 pounds and 2 ounces with a standard deviation of 7 ounces. a.At 95% confidence, compute the margin of error and explain what it shows.b.Determine a 95% confidence interval for the population mean weight of bags of sugar produced by the company. Give the answer in ounces and at least two significant digits.c.Each bag of sugar produced is supposed to contain 2 pounds of sugar, but the company allows 2% higher or lower than the 2 pounds. Have they reached their desired goal? Explain why or why not by giving numerical facts.
What will be an ideal response?