Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 80 percent and the probability of a recession is 20 percent. It is projected that the company will generate a total cash flow of $192 million in a boom year and $83 million in a recession. The company's required debt payment at the end of the year is $117 million. The market value of the company’s outstanding debt is $90 million. The company pays no taxes.
a. What payoff do bondholders expect to receive in the event of a recession? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, i. e. 1,234,567.)
Payoff $
b. What is the promised return on the company's debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e. g., 32.16))
Promised return %
c. What is the expected return on the company's debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e. g., 32.16))
Expected return %
Answers: 3
Business, 22.06.2019 06:00, slimt69561
When an interest-bearing note comes due and is uncollectible, the journal entry includes debitingaccounts receivable and crediting notes receivable and interest revenue. accounts receivable and crediting interest revenue. notes receivable and crediting accounts receivable and interest revenue. notes receivable and crediting accounts receivable.
Answers: 3
Business, 22.06.2019 21:50, Chloe0095
Which of the following best describes the economic effect that results from the government having a budget surplus? a. consumers save more and spend less, enabling long-term financial planning. b. overall demand decreases, reducing the incentive for producers to increase production. c. banks have more deposits, enabling them to make more loans to investors. d. government spending increases, increasing competition for goods and services and driving prices up.
Answers: 3
Business, 23.06.2019 02:20, maustin5323
Which one of the following is not a typical current liability? a. interest payable b. current maturities of long-term debt c. salaries payable d. mortgages payable
Answers: 3
Good Time Company is a regional chain department store. It will remain in business for one more year...
Biology, 12.05.2021 02:20
Mathematics, 12.05.2021 02:20
Mathematics, 12.05.2021 02:20