Help

Save & Exit

Submit

$1$

Check my work

Problem $2-18$ Functions of Financial Markets $($LO$3)$

$0\mathrm{.}06,$ Consider the table shown below to answer the question posed in part $a.$ Parts $b$ and $c$ are independent of the given table.

points

$\backslash$table$[[$eBook$],[$Print$],[$References$]]$

a$.$ The price of Yum! Brands stock has risen to $$185.$ What is the market value of the firm's equity if the number of outstanding shares does not change?

Note: Enter your asiswer in dollars not in billions of dollars.

b$.$ The rating agency ilas revised Catalytic Concepts' bond rating to A $($use Table $2\mathrm{.}2).$ What interest rate, approximately, would the company now need to pay on its bonds?

Note: Enter your answer as a percent rounded to $1$ decimal place.

c$.$ A farmer and a meatpacker use the commodity markets to reduce their risk. One agrees to buy live cattle in the future at a fixed price, and the other agrees to sell. Which one sells?

$\backslash$table$[[$a$.$ Market value,,,$],[$b$.$ Interest rate,,$1\mathrm{.}7,\%$