Answer:Yield to maturity is 9.59%; After tax cost of debt =7.672%
Explanation:
A) Yield to maturity ={ C + (FV-PV)/t} / {(FV +PV)/2}
Where C – Interest payment = $90
FV – Face value of the security
= $1000
PV – Present value/curent market value = $960
t – years it takes the security to reach maturity= 10 years
imputing the values and calculating,
yield to maturity ={ C + (FV-PV)/t} / {(FV +PV)/2}
= $90 + (1000-960)/10} / 1000 + 960 /2
$90 + 4= $94 /980= 0.0959
therefore Yield to maturity is 9.59%
B) After tax cost of debt = Yield To Maturity x (1 - tax rate)
=9.59% x (1-20%)= 9.59% x (1-0.2 )= 9.59% x 0.8 =
9.59 % x 80%=7.672%
Answer: Ralph does not have a good claim against Snowdrop, because age was not the deciding factor in Snowdrop’s decision to lay off Ralph.
Explanation: The reason for the firm laying off Ralph is vague and not explicitly stated. Therefore Ralph cannot make a claim against Snowdrop for laying him off due to his age.
In a franchise, the franchisor allows the franchisee to trade under its name and see its products for a fee The franchisee pays an original fee to franchisor and a
percentage of its profit for the privilege.So,since, Dunkin' Doughnuts is sharing its' brand name and image with David Ungar(his franchisee) it would definately want to improve it...at the least maintain it...David too is right on the other hand as there can be a possibility that he wants to use ingredients of a much higher quality than that provided.But dunkin' doughnuts can't still allow to do that as it has other franchisees to look after.Imagine that=>all the franchisees of dunkin' doughnuts use different ingredients with different quality..wouldn't this affects the image of the franchisor...also all the food items they sell will have a different taste depending on the ingredients.And if one of the franchisee buys cheap ingredients... thereby producing low quality out put ..the customers will not be satisfied...this will not only affect that franchisee but also the Brand image of the whole business worldwide.
To conclude,David may not be wrong with his idea but since dunkin' doughnuts is a big business with a good brand image...it has its' terms and requirements.
Answer:
$490,000.
Explanation:
To find out sales of Opal Company we will use below equation,
Sales = Variable cost + Fixed cost + Target profit
variable cost margin will be (1 - contribution margin)
= 0.7 (1 - 0.3)
we will consider sales as x,
x = 0.70x + $49,000 + 0.20x
x = 0.90x + $49,000
x - 0.90x = $49,000
x = $49,000 / 0.10
x = $490,000.
Sales = $490,000.
Answer:
Zero-cupon bond= $835.45
Explanation:
Giving the following information:
Face value= $1,000
YTM= 11.3%
Years to maturity= 16 years
<u>To calculate the price of the bond, we need to use the following formula:</u>
<u></u>
Zero-cupon bond= [face value/(1+i)^n]
Zero-cupon bond= 1,000 / (1.113^16)
Zero-cupon bond= $835.45