Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 14.3 percent for the next three years, with the growth rate falling off to a constant 4.4 percent thereafter. If the required return is 11.2 percent and the company just paid a dividend of $3.13, what is the current share price?

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Answer 1

The current share price of Synovec Co. is $107.12, which is obtained with help of the dividend discount model.

To calculate the current share price of Synovec Co., we need to use the dividend discount model (DDM) formula:

[tex]P = D₁/(r-g)[/tex]

where P is the current share price,[tex]D₁[/tex] is the expected dividend for next year, r is the required return or cost of equity, and g is the expected growth rate of dividends.

We are given the following information:

The expected growth rate of dividends for the next 3 years is 14.3%

The growth rate of dividends after the next 3 years is 4.4%

The required return or cost of equity is 11.2%

The most recent dividend paid was $3.13

To calculate the expected dividend for next year, we need to apply the growth rate to the current dividend:

[tex]D₂ = D₁ x (1 + g) = $3.13 x (1 + 0.143) = $3.57[/tex]

The expected dividend growth rate for the following years will be 4.4%, so we can use this rate to calculate the dividends for the years beyond the next three years. We can use the constant growth DDM formula to calculate the present value of all future dividends beyond year 3.

[tex]P = D₄/(r-g) = D₃ x (1+g)/(r-g) = D₂ x (1+g)²/(r-g) + D₃ x (1+g)³/(r-g) + ...[/tex]

= $3.57 x (1 + 0.044)/(0.112 - 0.044) = $64.07

Now, we can use the first DDM formula to calculate the present value of the dividends for the next three years:

[tex]P = D₁/(r-g) = $3.13 x (1 + 0.143)/(0.112 - 0.143) = $43.05[/tex]

Therefore, the current share price of Synovec Co. is:

P = $43.05 + $64.07 = $107.12

Hence, the current share price of Synovec Co. is $107.12.

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Answer 2

The current share price of Synovec Co. is $70.62. This is calculated by using the dividend discount model, which values a stock based on its future dividend payments.

To calculate the current share price, we first find the expected dividend payment for each of the next three years:Year 1: $3.13 x (1 + 14.3%) = $3.58

Year 2: $3.58 x (1 + 14.3%) = $4.09

Year 3: $4.09 x (1 + 14.3%) = $4.67Next, we calculate the present value of these expected dividends using the formula:PV = D1/(1+r)^1 + D2/(1+r)^2 + D3/(1+r)^3Where:

D1 = expected dividend for Year 1

D2 = expected dividend for Year 2

D3 = expected dividend for Year 3

r = required rate of returnUsing the values we calculated, we get:PV = $3.58/(1+11.2%)^1 + $4.09/(1+11.2%)^2 + $4.67/(1+11.2%)^3 = $9.57Finally, we calculate the present value of all future dividends beyond Year 3, which is simply:PV = Year 4 dividend / (r - g) = $4.67 x (1+4.4%) / (11.2% - 4.4%) = $69.05Adding these two present values together gives us the current share price:Current share price = $9.57 + $69.05 = $78.62However, since we already know that the company just paid a dividend of $3.13, we need to subtract this from the calculated share price to get the final answer:Current share price = $78.62 - $3.13 = $75.49Therefore, the current share price of Synovec Co. is $75.49.

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Related Questions

u.s. tax law is designed to raise revenues for the operations of the federal government and to promote certain socially desirable real estate-related activities. tax legislation is combined into a single section of the federal statutory law commonly referred to as:

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The tax legislation is combined into a single section of the federal statutory law commonly referred to as the Internal Revenue Code.

This code outlines the regulations and guidelines for the administration and enforcement of the U.S. tax law, which is designed to raise revenues for the operations of the federal government and to promote certain socially desirable real estate-related activities.

U.S. tax law is designed to raise revenues for the operations of the federal government and to promote certain socially desirable real estate-related activities. Tax legislation is combined into a single section of the federal statutory law commonly referred to as the Internal Revenue Code (IRC).

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A bond issued by Ray Donovan Incorporated has ten years until maturity and pays a 6% APR with semi-annual coupons. At maturity, the bond will also pay a face value of $1,000 to the bond holder. The current yield to maturity on the bond is 11% APR. What is the current trading price of the bond?

Answers

The current trading price of the Ray Donovan Incorporated bond is $757.11.

To calculate the current trading price of the bond, we need to find the present value of both the semi-annual coupon payments and the face value at maturity. First, we need to adjust the APR and yield to maturity (YTM) to semi-annual rates: 6%/2 = 3% and 11%/2 = 5.5%.

1. Find the present value of the semi-annual coupon payments:

Coupon payment = 3% * $1,000 = $30

PV of coupon payments = $30 * [(1 - (1 + 0.055)⁻²⁰) / 0.055] = $446.11

2. Find the present value of the face value at maturity:

PV of face value = $1,000 / (1 + 0.055)²⁰ = $311.00

3. Add the present values to find the current trading price:

Current trading price = $446.11 + $311.00 = $757.11

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frank castle corporation sold its accounts receivable outright to wright company, a financing company that normally buys accounts receivable of other companies without recourse. the accounts receivable have been:

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In this scenario, Frank Castle Corporation has sold its accounts receivable outright to Wright Company, a financing company that specializes in purchasing accounts receivable from other companies without recourse.

What's account receivable

Accounts receivable refer to the outstanding payments that a company expects from its customers for the goods or services provided to them. By selling their accounts receivable, Frank Castle Corporation has transferred the right to receive these payments to Wright Company.

Wright Company is a financing company that specializes in buying accounts receivable from other companies. When they buy accounts receivable, they do so without recourse.

This means that if the customer fails to pay, Wright Company cannot hold Frank Castle Corporation responsible for the debt. This transfer of accounts receivable can provide Frank Castle Corporation with immediate cash flow, while Wright Company will collect the payments from the customers directly. Overall, this can be a beneficial arrangement for both parties involved.

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Peter & Paul Chocolatiers have the following equity status: Preferred Stock $500,000 Common Stock (500,000 shares at $4 par) $2,000,000 Paid-in Capital in excess of par $200,000 Retained Earnings $700,000 Total Stockholders' equity $3,400,0001. What would be the change if any if the firm declares a 6-for-1 stock split? - There would be 3,000,000 shares outstanding at $0.66 par - There would be 8,333 shares outstanding at $24 par - Common stock would decrease to $333,000 - Common stock would increase to $12,000,000 2. What would be the change if any if the firm declares al-for-4 reverse stock split?- Common stock would decrease to $500,000 - Common stock would increase to $8,000,000 - There would be 125,000 shares outstanding at $16 par - There would be 2,000,000 shares outstanding at $1 par3. What would be the change if any if the firm declares a 2-for-1 stock split? - There would be 250,000 shares outstanding at $8 par - Common stock would decrease to $1,000,000 - There would be 1,000,000 shares outstanding at $2 par - Common stock would increase to $4,000,000 .

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If the firm declares a 6-for-1 stock split, there would be 3,000,000 shares outstanding at $0.66 par and common stock would decrease to $333,000.

If the firm declares a 1-for-4 reverse stock split, there would be 125,000 shares outstanding at $16 par and common stock would increase to $8,000,000.

A stock split is a corporate action that increases the number of outstanding shares while reducing the price per share. In a 6-for-1 stock split, the number of outstanding shares would increase by six times, resulting in a decrease in the par value per share.

The common stock would decrease in value, but the total equity of the firm would remain the same. In a 1-for-4 reverse stock split, the number of outstanding shares would decrease, resulting in an increase in the par value per share.

The common stock would increase in value, but the total equity of the firm would remain the same.

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What is section 85 rollover? How can this benefit a sole proprietorship while incorporating their business?
What are the types of income a CCPC can earn? Kindly explain how an active business income is taxed?

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Section 85 rollover is a provision in the Canadian Income Tax Act that allows a business owner to transfer property to a corporation on a tax-deferred basis. This provision is particularly beneficial for sole proprietors who wish to incorporate their business as it allows them to transfer their business assets to the corporation without incurring any immediate tax liability.

With the Section 85 rollover, the sole proprietor can transfer property such as inventory, equipment, or other business assets to the corporation in exchange for shares of the corporation. The transfer is considered to be at the fair market value of the property, and any gain on the property is deferred until it is realized on a subsequent disposition of the shares.

Incorporating a business can offer several advantages over a sole proprietorship, such as limited liability, tax planning opportunities, and access to capital. The Section 85 rollover provision allows business owners to incorporate their business while minimizing their tax liability on the transfer of assets.

A Canadian Controlled Private Corporation (CCPC) can earn different types of income, including active business income, passive income, and capital gains. Active business income is income earned from a corporation's regular business operations, while passive income is income earned from investments or other non-operational activities. Capital gains are the profits realized from the sale of capital property, such as stocks or real estate.

Active business income earned by a CCPC is taxed at a lower rate compared to other types of income. The Federal tax rate on the first $500,000 of active business income is currently at 9%, while the provincial tax rates vary. In some provinces, the combined Federal and Provincial tax rate on active business income can be as low as 12%.

In addition to the lower tax rates, CCPCs can also benefit from several tax planning opportunities, such as the ability to claim the Small Business Deduction, allowing them to deduct a portion of their active business income from their taxable income. CCPCs may also be eligible for other tax credits and deductions, such as the Scientific Research and Experimental Development (SR&ED) Tax Credit and the Accelerated Capital Cost Allowance (ACCA).

In summary, the Section 85 rollover provision can be an advantageous tax planning tool for sole proprietors who wish to incorporate their business. CCPCs can earn different types of income, with active business income being taxed at a lower rate, and may be eligible for tax credits and deductions that can further reduce their tax liability.

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assuming interest rates are positive, it is impossible for the present value of a given lump sum to exceed its future value of the same series. True or false?

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The statement "assuming interest rates are positive, it is impossible for the present value of a given lump sum to exceed its future value of the same series" is true. Because lump sum will increase over time by earning interests.

When interest rates are positive, the present value of a lump sum will always be less than its future value. This is because the lump sum will earn interest over time, causing its value to increase in the future. The relationship between present value, future value, interest rate, and time can be expressed using the present value formula:

Present Value = Future Value / (1 + Interest Rate)ⁿ

where n represents the number of periods.

As interest rates are positive, the denominator (1 + Interest Rate) ⁿ will always be greater than 1, resulting in a present value that is less than the future value.

Thus, the given statement is true.

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Assume that the equilibrium real federal funds rate is​ 2% and the target for inflation is 1.0%. Suppose that the inflation rate is at 4.0​%, leading to an inflation gap of 3.0​% ​(equal to 4.0​%minus1.0​%), and real GDP is 1.0​% above its​ potential, resulting in a positive output gap of 1.0​%.
The Taylor rule suggests that the federal funds rate should be set​ at:
A.6.00%.
B.9.00​%.
C.8.00%.
D.4.00%.

Answers

The Taylor rule suggests that the federal funds rate should be set​ at 8.00%. The correct answer is option c.

The Taylor rule is an economic formula that suggests the appropriate target federal funds rate based on the inflation gap and the output gap. The formula is:

Target federal funds rate = equilibrium real federal funds rate + current inflation rate + (0.5 x inflation gap) + (0.5 x output gap)

Using the given values:

Equilibrium real federal funds rate = 2%

Current inflation rate = 4%

Inflation gap = 4% - 1% = 3%

Output gap = 1%

Plugging these values into the Taylor rule formula, we get:

Target federal funds rate = 2% + 4% + (0.5 x 3%) + (0.5 x 1%) = 8%

Therefore, the answer is C. 8.00%. According to the Taylor rule, the federal funds rate should be set at 8.00% in order to close the inflation gap and output gap and achieve the target inflation rate of 1.0%.

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g two years ago, phutki corp. issued a $1,000 par value, 11 percent (annual payment) coupon bond. at the time the bond was issued it had 15 years to maturity. currently this bond is selling for $1,000 in the bond market. phutki corp. is now planning to issue a $1,000 par value bond with a coupon rate of 9 percent (semi annual payments) that will mature 25 years from today. assuming that the riskiness of the new bond is the same as the previous bond (i.e., the ytm on the new bond is equal to the current ytm on the previous bond), how much will investor's pay for this new bond?

Answers

The  investors will pay $835.48 for the new bond with a coupon rate of 9% and a maturity of 25 years, assuming the riskiness is the same as the previous bond.

To calculate the price investors will pay for the new bond, we first need to determine the current yield to maturity (YTM) on the previous bond. We can use the information given to calculate this:

- The bond has a $1,000 par value and a coupon rate of 11%, which means the annual interest payment is $110 ($1,000 x 0.11).
- The bond has 15 years to maturity.

Using a financial calculator or spreadsheet, we can find that the current YTM on the bond is 11%.

Now we can use this YTM to calculate the price investors will pay for the new bond:

- The new bond has a $1,000 par value and a coupon rate of 9%, which means the semi-annual interest payment is $45 ($1,000 x 0.09 / 2).
- The new bond will mature in 25 years.

Using a financial calculator or spreadsheet, we can find that the YTM on the new bond is also 11%.

With this information, we can use the bond pricing formula to calculate the price investors will pay for the new bond:

Price = (Coupon Payment / (1 + YTM/2)^n) + (Par Value / (1 + YTM/2)^n)

Where:

- Coupon Payment = $45
- YTM = 11%
- n = 50 (25 years x 2 semi-annual periods per year)
- Par Value = $1,000

Plugging in these values, we get:

Price = ($45 / (1 + 0.11/2)^50) + ($1,000 / (1 + 0.11/2)^50)
Price = $496.61 + $338.87
Price = $835.48

Therefore, investors will pay $835.48 for the new bond with a coupon rate of 9% and a maturity of 25 years, assuming the riskiness is the same as the previous bond.

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What is the bond equivalent yield on a S1 million T-bill that currently sells at 93.845 percent of its face value and is 117 days from maturity? (write your answer in So and round it to 2 decimal plac

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The bond equivalent yield on a S1 million T-bill that currently sells at 93.845 percent of its face value and is 117 days from maturity is 3.67%.

To calculate the bond equivalent yield on a T-bill, we need to first calculate the discount rate, which is the difference between the face value and the purchase price divided by the face value.

In this case, the purchase price is 93.845% of the face value of $1 million, or $938,450. The difference between the face value and the purchase price is $1,061,550. Dividing this by the face value of $1 million gives a discount rate of 1.06155.

Next, we need to annualize the discount rate by multiplying it by the number of days in a year and dividing by the number of days to maturity. In this case, there are 365 days in a year, and the T-bill has 117 days to maturity. So, the annualized discount rate is (1.06155 x 365) / 117 = 3.32%.

Finally, to convert the discount rate to a bond equivalent yield, we add it to the risk-free rate for a similar maturity. Assuming a risk-free rate of 0.35% for 117-day T-bills, the bond equivalent yield is 3.32% + 0.35% = 3.67%.

Therefore, the bond equivalent yield on the T-bill is 3.67%.

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Within the communication process when you are reading or seeing a billboard with an advertisement, you are known as the _
1) conversion
2) interpretation
3) transmission
4) complicatio
5) consumer
6) receiver

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When you are reading or seeing a billboard with an advertisement, you are known as the consumer or the receiver within the communication process.

As a consumer, you are the intended audience for the message being communicated through the billboard advertisement.

Your role as a receiver is to receive and interpret the message being transmitted through the advertisement.

The process of communication involves several steps, starting with the sender encoding a message and transmitting it through a channel, which is the billboard in this case.

The receiver then decodes the message and provides feedback to the sender. In the case of billboard advertising, the sender is the advertiser or the brand, while the receiver or consumer is the audience.

The consumer's role is critical in the success of the communication process.

They need to interpret and understand the message being communicated, and then take action, which could be purchasing the product or service advertised or taking note of the brand message.

If the consumer fails to interpret the message, the communication process fails. Therefore, the advertiser needs to ensure that the message is clear, concise, and relevant to the target audience.

In conclusion, the consumer or the receiver plays a crucial role in the communication process when reading or seeing a billboard with an advertisement.

Their interpretation and understanding of the message transmitted through the advertisement determine the success of the communication process.

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the following information is available in regard to revenues from sweet inc., a customer of the electronics division of multi trading inc. revenues $1,000,000 cost of goods sold 500,000 goods-handling labor 50,000 goods-handling equipment - depreciation 175,000 rent 125,000 marketing support 50,000 sales-order and delivery processing 25,000 general administration 125,000 allocated corporate-office costs 10,000 1,060,000` operating loss ($ 60,000) cost of goods sold, goods-handling labor, marketing support, sales-order, and delivery-processing costs can be saved if the account is withdrawn. there is no alternate use for warehouse space and goods-handling equipment. should multi trading inc. continue selling to sweet inc.?

Answers

Based on the information provided, it appears that Sweet Inc. is causing a loss for Multi Trading Inc.'s electronics division. So, Multi Trading Inc. should stop selling to Sweet Inc.

If Multi Trading Inc. were to withdraw the account with Sweet Inc., they could save costs such as cost of goods sold, goods-handling labor, marketing support, sales-order, and delivery-processing costs. However, it should be noted that there is no alternate use for the warehouse space and goods-handling equipment.

Therefore, Multi Trading Inc. needs to consider whether the loss from Sweet Inc. outweighs the cost savings from withdrawing the account. If the loss is significant, then it may be necessary to discontinue the relationship with Sweet Inc. However, if the loss can be mitigated or if there are other benefits to continuing the relationship, such as future potential revenues or marketing support, then Multi Trading Inc. may choose to continue selling to Sweet Inc.

In summary, Multi Trading Inc. should weigh the financial impact of Sweet Inc. on the electronics division, including the costs and potential benefits, before making a decision on whether to continue selling to them. Depreciation should also be considered as a factor in determining the overall profitability of the account.

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Document how the ability of monetary authorities to reduce involuntary unemployment depends on the marginal propensity to consume, on the sensitivity of investment to changes in interest rates, and the sensitivity of net exports to the exchange rate. Please include in charts or graphs to verify your thinking process

Answers

Monetary authorities, such as central banks, have the ability to reduce involuntary unemployment through various policies.

The effectiveness of these policies depends on several factors, including the marginal propensity to consume, the sensitivity of investment to changes in interest rates, and the sensitivity of net exports to the exchange rate.

The marginal propensity to consume refers to the amount of additional consumption that occurs when disposable income increases. If this propensity is high, then monetary policy can be more effective in reducing unemployment because an increase in spending will have a larger impact on overall demand.

The sensitivity of investment to changes in interest rates is also important. If investment is highly sensitive to interest rates, then monetary policy can be effective in stimulating investment and increasing overall demand. On the other hand, if investment is relatively insensitive to interest rates, then monetary policy may have limited impact.

Finally, the sensitivity of net exports to the exchange rate is also a key factor. If net exports are highly sensitive to changes in the exchange rate, then monetary policy can be effective in stimulating exports and increasing overall demand. However, if net exports are relatively insensitive to the exchange rate, then monetary policy may have limited impact.

Overall, the effectiveness of monetary policy in reducing involuntary unemployment depends on several factors, including the marginal propensity to consume, the sensitivity of investment to changes in interest rates, and the sensitivity of net exports to the exchange rate. These factors can be analyzed and incorporated into policy decisions using charts or graphs to visualize the potential impact of different policy options.

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Suppose you want to buy a $1,000 par value bond that pays $28 interest each quarter and with a maturity of 9 years from now. If you require 8% rate of retum with quarterly compounding, how much should you be willing to pay for this bond? (Round your answer to two decimal point)

Answers

The present value of the bond is $1,097.89.

We can calculate the present value of the bond by discounting the future cash flows using the given rate of return. The bond pays $28 every quarter for the next 9 years, which is a total of 36 payments. Using the formula for present value of an annuity, we can calculate the present value of these payments as:

PV = $28 x [1 - (1/ (1+0.08/4)^36)] / (0.08/4) = $943.35

In addition to the present value of the annuity, we also need to add the present value of the bond's face value ($1,000) at maturity. Using the formula for present value of a single amount, we can calculate this as:

PV = $1,000 / (1+0.08/4)^36 = $154.54

The total present value of the bond is therefore $943.35 + $154.54 = $1,097.89. This is the amount that an investor should be willing to pay for the bond in order to earn a return of 8% with quarterly compounding.

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charlie wants to generate long-term, new demand for their brand by reaching those who are not currently engaging with the category. what stage of the customer journey should charlie focus on?

Answers

Charlie should focus on the awareness stage of the customer journey to generate long-term, new demand for their brand.

At this stage, potential customers may not be aware of the brand or the category in which it operates. By creating brand awareness and educating customers about the benefits of the category, Charlie can attract new customers who were not previously engaged with the category. This can be done through various marketing tactics such as advertising, content marketing, and social media.

Once awareness is created, Charlie can then focus on nurturing those potential customers and moving them through the consideration and decision stages of the customer journey.

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Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for a portfolio with a beta of 1.0 is 14.0%. According to the capital asset pricing model:
Required:
a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.)
b. What would be the expected return on a zero-beta stock?

Answers

Answer:

Explanation:

Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 12%. According to the capital asset pricing model:

a. What is the expected return on the market portfolio?

b. What would be the expected return on a zero-beta stock?

c. Suppose you consider buying a share of stock at a price of $40. The stock is expected to pay a dividend of $3 next year and to sell then for $41. The stock risk has been evaluated at β = - .5. Is the stock overpriced or underpriced?

The correct answer would be:

a. 12%

b. 4%

c. Underpriced

Retro Inc. needs $2 million to automate all existing factories. The firm plans to sell bonds in the Eurodollar bond market. The bonds will have a maturity of five years, a par value of $1000, and coupon payments of $50 per year. After transaction costs & fees each Eurodollar bonds will net $968.00. What is the cost of these Eurodollar bonds? (Round to two decimal places.) 5.00% 6.95% 5.75% 4.41%

Answers

The cost of the Eurodollar bonds is 5.75%.

How to calculate bond valuation and the calculation of the yield to maturity (YTM) using the present value of future cash flows?

To calculate the cost of the Eurodollar bonds, we need to use the yield to maturity (YTM) formula. The YTM is the rate of return that equates the present value of all future cash flows from the bond to its current market price. The formula is:

P =[tex](\frac{C}{ r}) * (1 -\frac{ 1} { (1 + r)^n}) + \frac{F }{ (1 + r)^n}[/tex]

where P is the net price of the bond, C is the annual coupon payment, r is the YTM, n is the number of years to maturity, and F is the par value.

Using the given information, we can calculate the YTM as follows:

P = $968

C = $50

F = $1000

n = 5

968 = [tex](\frac{50} { r}) * (1 - \frac{1} { (1 + r)^5}) + \frac{1000 }{ (1 + r)^5}[/tex]

We can solve for r using numerical methods such as trial and error, or using Excel's RATE function. Doing so, we get:

r = 5.75%

Therefore, the cost of the Eurodollar bonds is 5.75%.

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LBJ Enterprises is issuing new bonds for a capital budgeting project. The bonds will mature in 20 years and have a coupon rate of 5.80% with semi-annual coupon payments (assume a par value of $1,000 on the bond). The current yield-to-maturity for similar bonds is 6.00%. The company hopes to raise $16 million with the new issue. To raise the debt, how many bonds must the company issue? (Round to the nearest whole number).

Answers

To raise $16 million, LBJ Enterprises must issue 15,561 bonds.

To calculate how many bonds LBJ Enterprises must issue to raise $16 million, we first need to calculate the price of each bond.

The coupon payments on the bond are semi-annual, so each coupon payment will be $1,000 x 5.80% / 2 = $29.00.

The number of semi-annual periods over 20 years is 20 x 2 = 40.

The present value of the coupon payments can be calculated using the formula for the present value of an annuity:

PV of coupon payments = $29.00 x (1 - 1/(1 + 3.00%)^40) / 3.00% = $732.12

To calculate the present value of the principal, we can use the formula for the present value of a lump sum:

PV of principal = $1,000 / (1 + 3.00%)^40 = $295.88

Therefore, the price of each bond is:

Price of bond = PV of coupon payments + PV of principal = $732.12 + $295.88 = $1,028

To raise $16 million, the number of bonds the company must issue is:

Number of bonds = $16,000,000 / $1,028 = 15,561.12

Rounding to the nearest whole number, LBJ Enterprises must issue 15,561 bonds to raise $16 million.

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LBJ Enterprises must issue 15,561 bonds in order to raise $16 million.

We must first figure out the price of each bond in order to determine how many bonds LBJ Enterprises will need to issue in order to raise $16 million.

Since the bond's coupon payments are semi-annual, each payment will be $1,000 x 5.80% / 2 = $29.00.

The number of semi-annual periods over 20 years is 20 x 2 = 40.

The formula for calculating the present value of an annuity may be used to determine the present value of the coupon payments:

PV of coupon payments = $29.00 x (1 - 1/(1 + 3.00%)^40) / 3.00% = $732.12

The formula for calculating the present value of a lump amount may be used to get the present value of the principal:

PV of principal = $1,000 / (1 + 3.00%)^40 = $295.88

Therefore, the price of each bond is:

Price of bond = PV of coupon payments + PV of principal = $732.12 + $295.88 = $1,028

To raise $16 million, the number of bonds the company must issue is:

Number of bonds = $16,000,000 / $1,028 = 15,561.12

To raise $16 million, LBJ Enterprises must issue 15,561 bonds, rounded to the closest whole number.

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An artist who sales his paintings to a gallery is paid an γ share of the revenue which gallery earns from selling his painting to consumers, where the revenue is R = pq. p = $20 is the competitive market price for paintings, and q is the number of paintings sold. Let us assume that the gallery only sales this artists paintings and the gallery’s cost is C(q) = 2q2. Determine the equilibrium, and compare it to the outcome that maximizes the sum of the payment to the painter plus the gallery’s profit. Show your answer using math and a graph.

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To find the equilibrium, we need to set the artist's revenue equal to the gallery's cost:

[tex]γR = C(q)[/tex]

Substituting [tex]R = pq[/tex] and[tex]C(q) = 2q^2[/tex], we get:

[tex]γpq = 2q^2[/tex]

Solving for q, we get: [tex]q = (γp/2)[/tex]

Substituting p = $20, we get:[tex]q = (γ/40)[/tex]

The gallery's revenue is then:

R =[tex]pq = (γ/40)($20)[/tex]

[tex]= γ/2[/tex]

To maximize the sum of the payment to the painter plus the gallery’s profit, we need to maximize the function:

S = [tex]γpq - C(q)[/tex]

Substituting p = $20 and C(q) [tex]= 2q^2[/tex], we get:

S = [tex]γ($20)(γ/40) - 2(γ/40)^2[/tex]

Simplifying, we get: S = [tex](γ^2/2) - (γ^2/800)[/tex]

S[tex]= (399γ^2/800)[/tex]

To find the value of γ that maximizes S, we take the derivative of S with respect to γ and set it equal to zero: [tex]dS/dγ = (399γ/400) = 0[/tex]

Solving for γ, we get:[tex]γ = 400/399[/tex]

Substituting this value of γ back into the equation for q, we get:[tex]q = (400/399)(1/40) = 1/398[/tex]

The gallery's revenue is then:

R =[tex]pq = (1/398)($20)[/tex]

[tex]= $0.05[/tex]

To compare the equilibrium and the outcome that maximizes the sum of the payment to the painter plus the gallery’s profit, we can graph the two functions: Equilibrium:[tex]R = (γ/2)q[/tex] Maximized Sum: [tex]S = (399γ^2/800)[/tex]. The intersection of the two functions represents the equilibrium point, where the artist's revenue equals the gallery's cost. This occurs at q = [tex](γ/40) = 1/398[/tex] and [tex]R = γ/2 = $0.025.[/tex]

The value of γ that maximizes the sum of the payment to the painter plus the gallery’s profit is γ = 400/399, which results in a revenue of R = [tex]$0.05[/tex] and a quantity of q =[tex]1/398.[/tex]

Thus, in this case, the outcome that maximizes the sum of the payment to the painter plus the gallery’s profit is better for both the artist and the gallery, as it results in higher revenue for the gallery and a higher payment for the artist.

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true or false: backlinks to a site fit into one of three categories: editorial, manual, or manufactured. true false

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The statement " backlinks to a site fit into one of three categories: editorial, manual, or manufactured" is true.

Each type of backlink has its own characteristics and impact on a website's search engine optimization (SEO) efforts.
Editorial backlinks are those that are earned naturally when a website creates high-quality, engaging, and informative content that other sites find valuable and want to link to.

This type of backlink is the most sought after, as it indicates that a site is seen as an authoritative source by others. Editorial backlinks help to improve a website's domain authority, which is an important factor in search engine rankings.

Manual backlinks are those that are acquired through deliberate efforts, such as reaching out to other website owners, guest posting, or participating in link exchange programs. While manual backlinks can be helpful in improving a website's SEO, they may not be as valuable as editorial backlinks since they are not earned purely on the merit of the content.

Manufactured backlinks are those that are artificially created using tactics that are against search engine guidelines, such as purchasing links or using automated link-building tools. These backlinks are generally considered as black-hat SEO techniques and can lead to penalties or even removal from search engine results if discovered.

In summary, backlinks can be categorized into editorial, manual, or manufactured types. Each has its own implications for a website's SEO strategy, with editorial backlinks being the most valuable and manufactured backlinks carrying the highest risk.

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According to the evidence-based management approach, managers must _____.
A) discourage employees from telling the unpleasant truth
B) be committed to fact-based decision making
C) avoid experimentation
D) completely rely on the recommendations made by others
E) base decisions on untested but strongly held beliefs

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According to the evidence-based management approach, managers must be committed to fact-based decision making. This means that they should rely on empirical evidence and data rather than intuition or personal beliefs. The correct option is B.

Evidence-based management involves identifying the best available evidence, evaluating it critically, and applying it to make decisions that are likely to achieve the desired outcomes. This approach is grounded in the idea that effective management requires a rigorous and systematic approach to problem-solving, decision-making, and continuous improvement.

Discouraging employees from telling the unpleasant truth or avoiding experimentation goes against the principles of evidence-based management. This approach encourages openness and transparency, and it values learning and experimentation as ways to generate new evidence and improve decision-making. Similarly, completely relying on the recommendations made by others or basing decisions on untested but strongly held beliefs can lead to poor outcomes and missed opportunities for improvement.

In summary, evidence-based management requires a commitment to fact-based decision-making, a willingness to experiment and learn, and an openness to feedback and criticism. By applying this approach, managers can improve their ability to make informed decisions, solve complex problems, and achieve better results for their organizations.

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You are thinking of buying a stock priced at $100 per share. Assume that the risk-free rate is about 4.1% and the market risk premium is 6.9%. If you think the stock will rise to 5122 per share by the end of the year, at which time it will pay a $2.07 dividend, what beta would need to have for this expectation to be consistent with tho CAPM? The beta is _______. (Round to two decimal places)

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The expectation to be consistent with the CAPM, the beta is 6.54.

To determine the beta needed for your expectation to be consistent with the Capital Asset Pricing Model (CAPM), we will use the following formula:

Expected Return = Risk-Free Rate + Beta × Market Risk Premium

First, we need to calculate the expected return on the stock:

Expected Return = (End of Year Stock Price + Dividend) / Initial Stock Price - 1

Expected Return = ($5122 + $2.07) / $100 - 1

Expected Return = 5124.07 / 100 - 1

Expected Return = 50.2407 - 1

Expected Return = 49.2407

Now, we plug the expected return, risk-free rate, and market risk premium into the CAPM formula and solve for beta:

49.2407 = 4.1 + Beta × 6.9

45.1407 = Beta × 6.9

Now, divide both sides by 6.9 to find the beta:

Beta = 45.1407 / 6.9

Beta ≈ 6.54

So, for your expectation to be consistent with the CAPM, the stock would need to have a beta of approximately 6.54 (rounded to two decimal places).

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if the spot price of gold is $990 per troy ounce, the risk-free interest rate is 6%, and storage and insurance costs are zero, what should be the forward price of gold for delivery in one year?

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The forward price of gold for delivery in one year, assuming zero storage and insurance costs, is $1,049.40 per troy ounce.

To calculate the forward price of gold for delivery in one year, we need to consider the cost of carry. Cost of carry is the cost of holding an asset, which includes storage, insurance, and financing costs.

In this case, we are assuming that storage and insurance costs are zero, so we only need to consider the financing cost, which is the risk-free interest rate of 6%.

The formula for calculating the forward price of an asset is:

Forward price = Spot price x (1 + financing cost)^time

In this case, time is one year, so we can plug in the numbers:

Forward price = $990 x (1 + 0.06)^1
Forward price = $1,049.40

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You have a saving plan. Under that plan, you will deposit $500 in a savings account with 12% (APR) at the end of every month. If you deposit that monthly amount for 10 years, how much your total saving will be at the end of the 10th year?

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Your total savings at the end of the 10th year will be $121,962.62.

You have a saving plan in which you deposit $500 every month in a savings account with a 12% APR. To calculate the total savings at the end of 10 years, we need to use the formula for the future value of an ordinary annuity:

FV = P * [(1 + r)^nt - 1] / r

Where:
FV = future value
P = periodic deposit amount ($500)
r = interest rate per period (12%/12 months = 1% = 0.01)
n = number of times the interest is compounded per year (12 times for monthly deposits)
t = number of years (10)

Plugging in the values, we get:

FV = 500 * [(1 + 0.01)¹²ˣ¹⁰ - 1] / 0.01
FV = 500 * [(1.01)¹²⁰ - 1] / 0.01
FV = 500 * 3.43924343 / 0.01
FV = 121,962.62

Therefore, your total savings at the end of the 10th year will be $121,962.62.

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which of the following would shift both the labor supply curve and the labor demand curve? group of answer choices there is an increase in the proportion of the population that is of working age. employers begin covering the cost of better health insurance for all employees. there is more effective management at companies. technological advancement increases worker productivity.

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Technological advancement increasing worker productivity would shift both the labour supply curve and the labour demand curve.

This is because technological advancements often lead to changes in the way work is done, which affects both the supply and demand for labour.

For example, if a new technology is developed that allows workers to produce more output in less time, then the demand for labour will likely increase as firms seek to take advantage of the increased productivity.

At the same time, workers may be willing to supply more labour at any given wage rate, since they are able to produce more in a given period of time.

Therefore, technological advancements tend to shift both the supply and demand curves for labour, leading to changes in wages and employment levels.

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revenues from dining services and athletic programs are examples of auxiliary enterprises revenues for a college or university. group of answer choices true false

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Revenues from dining services and athletic programs are examples of auxiliary enterprises revenues for a college or university. The correct answer choice is true.

Auxiliary enterprises are self-supporting entities within a college or university that provide non-instructional services to students, faculty, and staff. These services are typically not directly related to the institution's core educational mission but are essential to support the functioning of the campus community.

Examples of auxiliary enterprises revenues include revenues from dining services, athletic programs, parking facilities, bookstore sales, and student housing. These sources of revenue help to fund the operation and maintenance of the auxiliary services, ensuring that they continue to meet the needs of the campus community.

In summary, auxiliary enterprises revenues for a college or university, such as revenues from dining services and athletic programs, are essential in supporting the non-instructional services that enhance campus life and contribute to the overall experience for students, faculty, and staff.

This statement is true, as these revenues play a crucial role in sustaining the campus infrastructure and providing valuable resources and services to the community.

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julio is the assistant manager of the staff cafeteria at the vicor company. when he came in this morning, he found that raw sewage had backed up through the floor drain near the freezers. how should he handle this problem?

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Julio, as the assistant manager of the staff cafeteria at the Vicor Company, should handle the raw sewage backup issue with immediate and appropriate actions to ensure hygiene, safety, and business continuity.

First, Julio should close the cafeteria to all staff members, prioritizing their health and preventing further contamination. He should place visible signs to notify employees of the temporary closure. Next, he should contact the facilities or maintenance department to inform them of the issue and request assistance. It's essential to assess the cause of the sewage backup, such as a blockage or a faulty pipe, and take corrective measures.

Once the sewage backup is resolved, Julio should oversee a thorough cleaning and disinfection of the affected area, following proper sanitation guidelines. This may involve removing any contaminated items, scrubbing and disinfecting surfaces, and ensuring the cleanliness of equipment, including the freezers.

Finally, before reopening the cafeteria, Julio should conduct a final inspection to ensure that the area is safe, clean, and compliant with health and safety standards. He should also communicate with staff to inform them of the resolution and assure them that the cafeteria is now safe for use.

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vehicles begin to arrive at a park entrance at 7:45 a.m. at a constant rate of six per minute and at a constant rate of four vehicles per minute from 8:00 a.m. on. the park opens at 8:00 a.m. and the manager wants to set the departure rate so that the average delay per vehicle is no greater than 9 minutes (measured from the time of the first arrival until the total queue clears). assuming d/d/1 queuing, what is the minimum departure rate needed to achieve this?

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We have to, vehicles start arriving at a park entrance at 7:45 a.m. at a constant rate of six per minute and at a constant rate of four vehicles per minute starting at 8:00 a.m., where the minimum departure rate needed to achieve an average delay of 9 minutes per vehicle is 37/9 vehicles per minute. minute.

To determine the minimum departure rate needed to achieve an average vehicle delay of no more than 9 minutes, we must consider the given arrival rates and time period.

1. Between 7:45 am and 8:00 am vehicles arrive at the rate of six vehicles per minute. This is an interval of 15 minutes, so during this time 6 vehicles/min * 15 min = 90 vehicles will arrive.

2. After 8:00 am, vehicles arrive at a rate of four per minute.

Now, let's find the departure rate (D) needed to maintain the average delay of 9 minutes per vehicle.

1. The total delay time allowed is 9 minutes per vehicle, so for the first 90 vehicles, the total delay time allowed is 9 min/vehicle * 90 vehicles = 810 minutes.

2. Since the park opens at 8:00 a.m. m., we can begin processing vehicles that arrived between 7:45 a.m. and 7:45 p.m. m. and 8:00 a.m. m. We have 810 minutes to process these 90 vehicles, which means the output rate for this period should be 90 vehicles / 810 minutes = 1/9 vehicles per minute.

3. For vehicles arriving after 8:00 a.m. We want to keep the 9-minute delay, so the departure fee should equal the arrival fee plus any additional vehicles that will be processed within the 9-minute delay. Therefore, the departure rate should be 4 vehicles/min (arrival rate) + 1/9 vehicles/min (additional rate) = 37/9 vehicles/min.

Thus, the minimum departure rate necessary to achieve an average delay of 9 minutes per vehicle is 37/9 vehicles per minute.

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As one of the largest U.S. coal producers with approximately 1,600 employees, this $1.4 billion-dollar company is a fuel supplier for approximately 4% of the nation’s electricity. With a limited staff that was overwhelmed by increasing business demands, project quality began to wane for this young company as they grappled with managing the IT project portfolio. Although projects were being completed, the cost of project delivery was also increasing. The client’s leadership team recognized that something was wrong, and knew they needed outside support to evaluate the situation and identify the best remedies to apply.
Your task is to brainstorm as to what the project manager can do to improve project and portfolio management, in order to control costs and increase yield.
1. What can be done to identify warning signs earlier in the project, to address quality issues?
2. What kind of infrastructure needs to be in place to successfully complete this project?
3. What could you (as the Project Manager) do differently the next time you are dealing with an overwhelmed staff and increasing business demands?

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1.  The project manager can establish a culture of transparency and open communication, encouraging team members to report concerns and issues as soon as they arise.

2. The PMO should also define and enforce project management standards and best practices, and provide training and resources to help team members develop their skills.

3. The project manager can focus on team development, providing training, coaching, and mentoring to help team members improve their skills and productivity.

A project manager is a professional responsible for overseeing and leading projects within an organization. They are responsible for planning, organizing, executing, and monitoring a project to ensure it meets its goals within the given time frame and budget. The project manager's main focus is to ensure that the project is completed successfully and meets the expectations of all stakeholders.

Project managers typically have a broad range of responsibilities, including defining project goals, creating project plans, managing project resources, communicating with stakeholders, tracking progress, managing risk, and ensuring that the project is delivered on time, within budget, and to the required quality standards. To be a successful project manager, one must possess excellent organizational, communication, leadership, and problem-solving skills.

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Redo the calculations reported in Table 5.3 for the following: (a) Employees' compensation as a share of national income. (b) The labor force participation rate. (c) The federal government budget deficit as a share of GDP. (d) The Standard and Poor's 500 composite stock price index. (e) The difference in yields between Moody's Baa and Aaa bonds. (f) The difference in yields between 10-year and 3-month U.S. Treasury securities. (g) The weighted average exchange rate of the U.S. dollar against major currencies.

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(a) Employees' compensation as a share of national income:
We would need to calculate the total amount of compensation paid to employees by all businesses in the country and divide it by the total national income. This would give us the percentage of national income that goes towards compensating employees.

(b) The labor force participation rate:
We would need to calculate the number of people who are employed or actively seeking employment (the labor force) and divide it by the total population of working-age individuals. This would give us the labor force participation rate.

(c) The federal government budget deficit as a share of GDP:
We would need to calculate the total amount by which the federal government's expenditures exceed its revenues (the budget deficit) and divide it by the total GDP. This would give us the percentage of GDP that is represented by the budget deficit.

(d) The Standard and Poor's 500 composite stock price index:
We would need to track the price movements of the 500 large-cap stocks that are included in the S&P 500 index and calculate the composite stock price index accordingly.

(e) The difference in yields between Moody's Baa and Aaa bonds:
We would need to compare the yields (or interest rates) on Moody's Baa-rated bonds (lower-rated bonds with higher default risk) to the yields on Aaa-rated bonds (higher-rated bonds with lower default risk) and calculate the difference between the two.

(f) The difference in yields between 10-year and 3-month U.S. Treasury securities:
We would need to compare the yields on 10-year U.S. Treasury securities to the yields on 3-month U.S. Treasury securities and calculate the difference between the two.

(g) The weighted average exchange rate of the U.S. dollar against major currencies:
We would need to track the exchange rates of the U.S. dollar against major currencies (such as the euro, yen, and pound) and calculate a weighted average of those exchange rates based on the importance of each currency in international trade.

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Anle Corporation has a current price of $14, is expected to pay a dividend of $1 in one year, and its expected price right after paying that dividend is $15. a. What is Anle's expected dividend yield? b. What is Anle's expected capital gain rate? c. What is Anle's equity cost of capital? a. What is Anle's expected dividend yield? Anle's expected dividend yield is %. (Round to two decimal places.) b. What is Anle's expected capital gain rate? Anle's expected capital gain rate is %. (Round to two decimal places.) c. What is Anle's equity cost of capital? Anle's equity cost of capital is %. (Round to two decimal places.)

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a. Anle's expected dividend yield is 7.14%.

b. Anle's expected capital gain rate is 7.14%.

c. Anle's equity cost of capital is 14.29%.

a. Anle's expected dividend yield can be calculated as the expected dividend ($1) divided by the current price ($14), which is 0.0714 or 7.14%.

b. Anle's expected capital gain rate can be calculated as the expected price ($15) minus the current price ($14), divided by the current price ($14), which is 0.0714 or 7.14%.

c. Anle's equity cost of capital can be calculated using the dividend discount model as the sum of the expected dividend ($1) divided by the current price ($14), plus the expected capital gain rate (0.0714), which is 0.1429 or 14.29%

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