A firm issued an 8% coupon bond (semiannual coupon payment) 20 years ago. The bond now has 10 years left until its maturity date, but the firm is having financial difficulty. Investors believe that the firm will be able to make interest rate payments only for the first eight years. Starting in year nine, the firm will not be able to pay any coupon. In total, the firm will miss four coupon payments. Also, investors believe that the firm will be forced into bankruptcy eventually and bondholders will receive only 75% of par value. a. If the required interest rate is 11%, what is the present value of the coupon payments that the firm is able to pay? What is the present value of the par that the firm is able to pay?
b. What should the bond be selling at?
c. What is the stated yield-to-maturity (YTM) of the bond?

If we know that a firm has a net profit margin of 4.6 %, total asset turnover of 0.62, and a financial leverage multiplier of 1.54, what is its roe? what is the advantage to using the dupont system to calculate roe over the direct calculation of earnings available for common stockholders divided by common stock equity?

When an interest-bearing note comes due and is uncollectible, the journal entry includes debiting

Recently, verizon wireless ran a pricing trial in order to estimate the elasticity of demand for its services. the manager selected three states that were representative of its entire service area and increased prices by 5 percent to customers in those areas. one week later, the number of customers enrolled in verizon's cellular plans declined 4 percent in those states, while enrollments in states where prices were not increased remained flat. the manager used this information to estimate the own-price elasticity of demand and, based on her findings, immediately increased prices in all market areas by 5 percent in an attempt to boost the company's 2016 annual revenues. one year later, the manager was perplexed because verizon's 2016 annual revenues were 10 percent lower than those in 2015"the price increase apparently led to a reduction in the company's revenues. did the manager make an error? yes - the one-week measures show demand is inelastic, so a price increase will decrease revenues. yes - the one-week measures show demand is elastic, so a price increase will reduce revenues. yes - cell phone elasticity is likely much larger in the long-run than the short-run. no - the cell phone market must have changed between 2011 and 2012 for this price increase to lower revenues.