G Jordan Enterprises plans to issue $120,000,000 of 20-year semi-annual bonds in September to help finance a new factory. It is January, and the current cost of debt to the company is 9 percent. However, the firm’s financial manager is concerned that interest rates will climb by 1.5 percent in a current high inflation environment. a) What would be the outcome if interest rates climb by 1.5 percent and Jordan did not hedge its position? b) If Jordan hedges the bond issue, it will use the Treasury bond ($100,000) futures contracts that are currently trading at 129-2. What would be the outcome if Jordan hedges its position and interest rates climb by 1.5 percent on the Treasury bond as well?
Answers: 1
Other questions on the subject: Business
Business, 22.06.2019 01:00, taee67
Paar corporation bought 100 percent of kimmel, inc., on january 1, 2012. on that date, paar’s equipment (10-year life) has a book value of $420,000 but a fair value of $520,000. kimmel has equipment (10-year life) with a book value of $272,000 but a fair value of $400,000. paar uses the equity method to record its investment in kimmel. on december 31, 2014, paar has equipment with a book value of $294,000 but a fair value of $445,200. kimmel has equipment with a book value of $190,400 but a fair value of $357,000. the consolidated balance for the equipment account as of december 31, 2014 is $574,000. what would be the impact on consolidated balance for the equipment account as of december 31, 2014 if the parent had applied the initial value method rather than the equity method? the balance in the consolidated equipment account cannot be determined for the initial value method using the information given. the consolidated equipment account would have a higher reported balance. the consolidated equipment account would have a lower reported balance. no effect: the method the parent uses is for internal reporting purposes only and has no impact on consolidated totals.
Answers: 2
Business, 23.06.2019 11:20, dontcareanyonemo
In march 2012, the state of california started requiring that all packaging for food and drink with the additive 4-methylimidazole (4-mi) be clearly labeled with a cancer warning. because of this, both pepsi and coke changed their formula to eliminate 4-mi as an ingredient. if pepsi and coke did not change their formula, holding all else constant, what would have happened to the demand for these goods, assuming pepsi and coke were in a competitive market? a. the demand curve for both pepsi and coke would have shifted to the right, causing the price of both products to decrease and the profits for the companies to fall. b. the demand curve for pepsi and coke would have remained unchanged, but the price of both products would have decreased and the profits for the companies would have fallen. c. the demand curve for pepsi and coke would have decreased, but the prices and profits would not have changed. d. the demand curve for only one of them would change because pepsi and coke are substitutes. e. the demand curve for pepsi and coke would have shifted to the left, causing the price of both products to decrease and the profits for both companies to fall.
Answers: 3
Do you know the correct answer?
G Jordan Enterprises plans to issue $120,000,000 of 20-year semi-annual bonds in September to help f...
Questions in other subjects:
Mathematics, 01.09.2019 01:10
Biology, 01.09.2019 01:10
Chemistry, 01.09.2019 01:10
Biology, 01.09.2019 01:10
Social Studies, 01.09.2019 01:10
Mathematics, 01.09.2019 01:10
English, 01.09.2019 01:10
History, 01.09.2019 01:10
