BBA 3310 Unit VI AssignmentInstructions: Enter all answers directly in this worksheet. When finished select Save As, and save this document using your last name and student ID as the file name. Upload the data sheet to Blackboard as a .doc,.docx or<\/p>\n
BBA 3310 Unit VI Assignment<\/p>\n
Instructions: Enter all answers directly in this worksheet. When finished select Save As, and save this document using your last name and student ID as the file name. Upload the data sheet to Blackboard as a .doc,.docx or .rtf file when you are finished.<\/p>\n
Question 1:(10 points).(Bond valuation) Calculate the value of a bond that matures in 12 years and has $1,000 par value. The annual coupon interest rate is 9 percent and the market\u2019s required yield to maturity on a comparable-risk bond is 12 percent. Round to the nearest cent.<\/p>\n
The value of the bond is<\/p>\n
Question 2: (10 points).(Bond valuation) Enterprise, Inc. bonds have an annual coupon rate of 11 percent. The interest is paid semiannually and the bonds mature in 9 years. Their par value is $1,000. If the market\u2019s required yield to maturity on a comparable-risk bond is 14 percent, what is the value of the bond? What is its value if the interest is paid annually and semiannually? (Round to the nearest cent.)<\/p>\n
a. The value of the Enterprise bonds if the interest is paid semiannually is
$
b. The value of the Enterprise bonds if the interest is paid annually is
$<\/p>\n
Question 3: (10 points).(Yield to maturity) The market price is $750 for a 20-year bond ($1,000 par value) that pays 9 percent annual interest, but makes interest payments on a semiannual basis (4.5 percent semiannually). What is the bond\u2019s yield to maturity? (Round to two decimal places.)<\/p>\n
The bond\u2019s yield to maturity is<\/p>\n
%<\/p>\n
Question 4: (10 points).(Yield to maturity) A bond\u2019s market price is $950. It has a $1,000 par value, will mature in 14 years, and has a coupon interest rate of 8 percent annual interest, but makes its interest payments semiannually. What is the bond\u2019s yield to maturity? What happens to the bond\u2019s yield to maturity if the bond matures in 28 years? What if it matures in 7 years?(Round to two decimal places.)<\/p>\n
The bond\u2019s yield to maturity if it matures in 14 years is<\/p>\n
%
The bond\u2019s yield to maturity if it matures in 28 years is<\/p>\n
%
The bond\u2019s yield to maturity if it matures in 7 years is<\/p>\n
%<\/p>\n
Question 5: (15 points).(Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70 in interest, with a $1,000 par value and matures in 25 years. The markers required yield to maturity on a comparable-risk bond is 8 percent.(Round to the nearest cent.)For questions with two answer options (e.g. increase\/decrease) choose the best answer and write it in the answer block.<\/p>\n
Question
Answer
a. What is the value of the bond if the markers required yield to maturity on a comparable-risk bond is 8 percent?
$<\/p>\n
b. What is the value of the bond if the markers required yield to maturity on a comparable-risk bond increases to 11 percent?
$<\/p>\n
c. What is the value of the bond if the market\u2019s required yield to maturity on a comparable-risk bond decreases to 7 percent?<\/p>\n
$<\/p>\n
d. The change in the value of a bond caused by changing interest rates is called interest-rate risk. Based on the answer: in parts b and c, a decrease in interest rates (the yield to maturity) will cause the value of a bond to (increase\/decrease):<\/p>\n
By contrast in interest rates will cause the value to (increase\/decrease):<\/p>\n
Also, based on the answers in part b, if the yield to maturity (current interest rate) equals the coupon interest rate, the bond will sell at (par\/face value):<\/p>\n
exceeds the bond\u2019s coupon rate, the bond will sell at a (discount\/premium):<\/p>\n
and is less than the bond\u2019s coupon rate, the bond will sell at a (discount\/premium):<\/p>\n
e. Assume the bond matures in 5 years instead of 25 years, what is the value of the bond if the yield to maturity on a comparable-risk bond is 8 percent? $ 960.07 Assume the bond matures in 5 years instead of 25 years, what is the value of the bond if the yield to maturity on a comparable-risk bond is 11 percent?
$<\/p>\n
f. Assume the bond matures in 5 years instead of 25 years, what is the value of the bond if the yield to maturity on a comparable-risk bond is 7 percent?
$<\/p>\n
g. From the findings in part e, we can conclude that a bondholder owning a long-term bond is exposed to (more\/less) interest-rate risk than one owning a short-term bond.<\/p>\n
Question 6: (5 points).(Measuring growth) If Pepperdine, Inc.\u2019s return on equity is 14 percent and the management plans to retain 55 percent of earnings for investment purposes, what will be the firm\u2019s growth rate?(Round to two decimal places.)<\/p>\n
The firm\u2019s growth rate will be
7.70
%<\/p>\n
Question 7: (10 points).(Common stock valuation) The common stock of NCP paid $1.29 in dividends last year. Dividends are expected to grow at an annual rate of 6.00 percent for an indefinite number of years. (Round to the nearest cent.)<\/p>\n
a. If your required rate of return is 8.70 percent, the value of the stock for you is:
$
b. You (should\/should not) make the investment if your expected value of the stock is (greater\/less) than the current market price because the stock would be undervalued.<\/p>\n
Question 8: (10 points).(Measuring growth) Given that a firm\u2019s return on equity is 22 percent and management plans to retain 37 percent of earnings for investment purposes, what will be the firm\u2019s growth rate? If the firm decides to increase its retention rate, what will happen to the value of its common stock? (Round to two decimal places.)<\/p>\n
a. The firm\u2019s growth rate will be:
8.14%
b. If the firm decides to increase its retention ratio, what will happen to the value of its common stock? An increase in the retention rate will (increase\/decrease) the rate of growth in dividends, which in turn will (increase\/decrease) the value of the common stock.<\/p>\n
Question 9: (10 points).(Relative valuation of common stock) Using the P\/E ratio approach to valuation, calculate the value of a share of stock under the following conditions:<\/p>\n
\u00b7 the investor\u2019s required rate of return is 13 percent,
\u00b7 the expected level of earnings at the end of this year (E1) is $8,
\u00b7 the firm follows a policy of retaining 40 percent of its earnings,
\u00b7 the return on equity (ROE) is 15 percent, and
\u00b7 similar shares of stock sell at multiples of 8.571 times earnings per share.<\/p>\n
Now show that you get the same answer using the discounted dividend model. (Round to the nearest cent.)<\/p>\n
a. The stock price using the P\/E ratio valuation method is:
$
b. The stock price using the dividend discount model is:
$<\/p>\n
Question 10: (10 points) (Preferred stock valuation) Calculate the value of a preferred stock that pays a dividend of $8.00 per share when the market\u2019s required yield on similar shares is 13 percent. (Round to the nearest cent.)<\/p>\n
a. The value of the preferred stock is
$
Per share<\/p>\n
Life under the Chief Doublespeak Officer
By William Lutz
If there\u2019s one product American business can produce in large amounts, it\u2019s doublespeak. Doublespeak is language that only pretends to say something; it\u2019s language that hides, evades or misleads.
Doublespeak comes in many forms, from the popular buzzwords that everyone uses but no one really understands \u2013 \u201cglocalization,\u201d \u201ccompetitive dynamics,\u201d \u201cre-equitizing\u201d and \u201cempowerment\u201d \u2013 to language that tries to hide meaning: \u201cre-engineering,\u201d \u201csynergy,\u201d \u201cadjustment,\u201d \u201crestructure\u201d and \u201cforce management program.\u201d
With doublespeak, no truck driver is the worst driver, just the \u201cleast-best\u201d driver, and bribes and kickbacks are called \u201crebates\u201d or \u201cfees for product testing.\u201d Even robbery can be magically transformed with doublespeak, as a bank in Texas did when it declared a robbery of an ATM to be an \u201cauthorized transaction.\u201d Willie Sutton would have loved to have heard that.
Automobile junkyards, junk and used car parts have become \u201cauto dismantlers and recyclers\u201d who sell \u201cpredismantled, previously owned parts.\u201d Don\u2019t want people to know you\u2019re in the business of disposing of radioactive and chemical wastes? Then call your company \u201cU.S. Ecology Inc.\u201d
Wages may not be increasing, but the doublespeak of job titles sure has increased. These days, your job title has to have the word \u201cchief\u201d in it. How many kinds of \u201cchiefs\u201d are there? Try these titles on for size: Chief Nuclear Officer, Chief Procurement Officer, Chief Information Officer, Chief Learning Officer, Chief Transformation Officer, Chief Cultural Officer, Chief People Officer, Chief Ethics Officer, Chief Turnaround Officer, Chief Technology Officer, and Chief Creative Officer. After all the \u201coperations improvement\u201d corporations have undergone, you have to wonder who all those \u201cchiefs\u201d are leading. Never before have so few been led by so many.
These days, a travel agent may be called a \u201ctravel counselor,\u201d \u201cvacation specialist,\u201d \u201cdestination counselor\u201d or \u201creservation specialist.\u201d As part of their merger, Chase Manhattan Bank and Chemical Bank decided that the position of \u201cRelationship Manager\u201d would be divided between executives of both banks. What is a \u201cRelationship Manager\u201d? Once upon a time this person was called a salesman. And if you\u2019re late in paying your bill after buying something from one of these \u201cRelationship Managers,\u201d you\u2019ll be called by the \u201cPersistency Specialist,\u201d or bill collector. If you\u2019re \u201cdownsized,\u201d the \u201cOutplacement Consultant\u201d or unemployment counselor will help you with \u201cre-employment engineering,\u201d or how to find another job.
With doublespeak, banks don\u2019t have \u201cbad loans\u201d or \u201cbad debts\u201d; they have \u201cnonperforming assets\u201d or \u201cnonperforming credits\u201d which are \u201crolled over\u201d or \u201crescheduled.\u201d Corporations never lose money; they just experience \u201cnegative cash flow,\u201d \u201cdeficit enhancement,\u201d \u201cnet profit revenue deficiencies,\u201d or \u201cnegative contributions to profits.\u201d
No one gets fired these days, and no one gets laid off. If you\u2019re high enough in the corporate pecking order, you \u201cresign for personal reasons.\u201d (And then you\u2019re never unemployed; you\u2019re just in an \u201corderly transition between career changes.\u201d)
But even those far below the lofty heights of corporate power are not fired or laid off. Firing workers is such big business in these days of \u201cre-engineering,\u201d \u201crestructuring\u201d and \u201cdownsizing\u201d that there are companies whose business is helping other companies fire their workers. (Think about that for a minute.) These companies provide \u201ctermination and outplacement consulting\u201d for corporations involved in \u201creduction activities.\u201d In other words, they teach companies how to fire or lay off workers. During these days of \u201ccost rationalization,\u201d companies fire or lay off workers many different ways. How do I fire thee? Let me count the ways.
Companies make \u201cworkforce adjustments,\u201d \u201cheadcount reductions,\u201d \u201ccensus reductions,\u201d or institute a program of \u201cnegative employee retention.\u201d Corporations offer workers \u201cvocational relocation,\u201d \u201ccareer assignment and relocation,\u201d a \u201ccareer change opportunity,\u201d or \u201cvoluntary termination.\u201d Workers are \u201cdehired,\u201d \u201cdeselected,\u201d \u201cselected out,\u201d \u201crepositioned,\u201d \u201csurplussed,\u201d \u201crightsized,\u201d \u201ccorrect sized,\u201d \u201cexcessed,\u201d or \u201cuninstalled.\u201d Some companies \u201cinitiate operations improvements,\u201d \u201cassign candidates to a mobility pool,\u201d \u201cimplement a skills mix adjustment,\u201d or \u201celiminate redundancies in the human resources area.\u201d
One company denied it was laying off 500 people at its headquarters. \u201cWe don\u2019t characterize it as a layoff,\u201d said the corporate doublespeaker (sometimes called a spin doctor). \u201cWe\u2019re managing our staff resources. Sometimes you manage them up, and sometimes you manage them down.\u201d Congratulations. You\u2019ve just been managed down, you staff resource you.
An automobile company announced the closing of an entire assembly plant and the elimination of over 8,000 jobs by announcing \u201ca volume-related production schedule adjustment.\u201d Not to be outdone by its rival, another car company \u201cinitiated a career alternative enhancement program\u201d\u2018 that enhanced over 5,000 workers out of their jobs. By calling the permanent shutdown of a steel plant an \u201cindefinite idling,\u201d a corporation thought that it wouldn\u2019t have to pay severance or pension benefits to the workers who were left without jobs.
Doublespeak can pay for the company, but usually not for the workers who lose their jobs.
As Pogo said, \u201cWe have met the enemy, and he is us.\u201d Or maybe Dilbert got it better: \u201cDo we really get paid for writing this stuff?\u201d
William Lutz is professor of English at Rutgers University and author of the new book The New Doublespeak: Why No One Knows What Anyone\u2019s Saying Anymore.<\/p>\n
Used only reliable sources as defined in course readings.
25
Correctly formatted the paper and each citation for each reference in APA style.
25
Included a detailed annotation for each citation.
25
Used correct spelling and grammar in annotations and citations.
25
Total:
100<\/p>\n","protected":false},"excerpt":{"rendered":"
BBA 3310 Unit VI AssignmentInstructions: Enter all answers directly in this worksheet. When finished select Save As, and save this document using your last name and student ID as the file name. Upload the data sheet to Blackboard as a Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-184148","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/184148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=184148"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/184148\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=184148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=184148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=184148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}