Answer:
Contract manufacturing.
Explanation:
A domestic firm may decide to contract for the production of its goods by established foreign manufacturer. Such private-label manufacturing by a foreign company is called contract manufacturing.
Contract manufacturing involves the process of outsourcing a company's manufacturing business, such that a foreign company engages in the production of a private-label product which are then primarily marketed or distributed by a domestic company under its own brand name.
This ultimately implies that, it is a manufacturing process which involves the production of goods by a company under the brand name of another company.
Answer:
<em>1</em><em>. </em><em>Economies of scale.</em>
<em>2</em><em>. </em><em>Capital requirements</em><em>.</em>
<em>3</em><em>. </em><em>Product differentiation. </em>
Answer:
YTM = 8.93%
YTC = 8.47%
Explanation:
The first part is the present value of the coupon payment until the bond is called.
The second is the present value of the called amount
P = market price value = 1,200
C = annual coupon payment = 1,000 x 12% 120
C/2 = 60
CP = called value = 1,060
t = time = 6 years
Using Financial calculator we get the YTC
8.467835879%
The first part is the present value of the coupon payment until manurity
The second is the present value of the redeem value at maturity
P = market price value = 1,200
C = coupon payment = 1,000 x 12%/2 = 60
C/2 = 60
F = face value = 1,060
t = time = 10 years
Using Financial calculator we get the YTM
8.9337714%
Answer:
The Treynor index for the stock will be 0.02.
Explanation:
The average return of the stock is 10%.
The average risk-free rate is 7%.
The standard deviation of the stock's return is 4%.
Stock's beta is given at 1.5.
Treynor index
= (Portfolio return- risk free return)/beta of the portfolio
=(0.10-0.07)/1.5
=0.03/1.5
=0.02
So, the Treynor index for the stock will be 0.02.
Answer: 9.2%
Explanation:
The interest rate that Rolling Coast should expect to issue new bonds will be calculated thus:
Firstly, we will calculate the previous risk premium on BBB bonds which will be:
= 11.5% - 8.7% = 2.8%
Then, the new risk premium on BBB bonds will be:
= Previous risk premium / 2
= 2.8% / 2
= 1.4%
Then, the interest rate that Rolling Coast should expect to issue new bonds will be:
= 7.8% + 1.4%
= 9.2%