Valuing Callable Bonds Bowdeen Manufacturing intends to issue callable, perpetual bonds with annual coupon payments. The bonds are callable at $1,250. One-year interest rates are 11 percent. There is a 60 percent probability that long-term interest rates one year from today will be 13 percent, and a 40 percent probability that they will be 9 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value?

Beswick company your team is allocated a project involving a major client, the beswick company. although the organization has many clients, this client, and project, is the largest source of revenue and affects the work of several other teams in the organization. the project requires continuous involvement with the client, so any problems with the client are immediately felt by others in the organization. jamie, a member of your team, is the only person in the company with whom this client is willing to deal. it can be said that jamie has:

Suppose your rich uncle gave you $50,000, which you plan to use for graduate school. you will make the investment now, you expect to earn an annual return of 6%, and you will make 4 equal annual withdrawals, beginning 1 year from today. under these conditions, how large would each withdrawal be so there would be no funds remaining in the account after the 4th withdraw?

Why is efficiency an important economic goal?