Hot answers tagged

23

The link to an article about the original bet Joe Strazzere pointed to answers this question quite clearly. It's between Buffett (not Berkshire) and Protégé (the firm, not its funds). And there's serious money at stake. Each side put up roughly $320,000. The total funds of about $640,000 were used to buy a zero-coupon Treasury bond that will be worth $1 ...


8

No, having to borrow money does not necessarily mean a company will have a hard time paying the interest on it. Similarly, having to take out a mortgage on a house does not mean a person will not be able to make their mortgage payments. Borrowing money can be a way to spend future money instead of present money (at a cost, of course). A company might not ...


8

The coupon should save you $10 either way, assuming that you meet the criteria for using the coupon. You're figuring out the discount based on the cost of the food alone. You should be including the tip in your calculations. Yes, they're tacking on something that is otherwise optional, but that's because enough people forget that the server works just as ...


5

In almost any jurisdiction, the restaurant will pay tax on the amount after the discount. Discounting is just a selective way to reduce prices for particular clients and thus achieve some degree of price discrimination. It's no different in principle to cutting prices for everyone or having a sale or similar. It would be very strange for a tax jurisdiction ...


5

$36.50 * 12 = $438.00 If you give this a bit of thought, in the US rates are sub 5%/year, not 44%/year. The coupon rate is an annual rate, so you get $36.50 total each year.


5

Apple is currently the most valuable company in the world by market capitalisation and it has issued bonds for instance. Amazon have also issued bonds in the past as have Google. One of many reasons companies may issue bonds is to reduce their tax bill. If a company is a multinational it may have foreign earnings that would incur a tax bill if they were ...


4

I owned a restaurant for over 5 years. Sales tax was only collected on POST discount price, though every state that collects sales tax may have different laws regarding collection. For example, when a customer used a gift certificate, that did NOT reduce the amount that tax was collected on. Why? Because the restaurant at some point or another collected ...


4

mhoran_psprep is spot on. By doing a strict debit/credit analysis, this seems like a golden opportunity. Spend ~$133 for $245 in gift cards. Presumably you could sell those gift cards at a 20% discount, or use them on the next trip. You received $1760 worth of merchandise for a positive income. Some of that merchandise could be sold. Sealed health ...


4

It can be done, but it takes a very special set of circumstances: You must be willing to buy only items that you can get for free or nearly free. You must be willing to buy as many items as the store will allow you to in a single visit The store must offer programs like double or triple manufacturers coupons. You must be willing to do everything you can to ...


3

These kind of prizes ("Incentive award schemes") are tax-free to the employee subject to certain conditions. HMRC's pages about it are here: http://www.hmrc.gov.uk/manuals/eimanual/EIM11200.htm Follow the first link to the page called "EIM11205 - Incentive award schemes: tax liability on incentive awards". The idea is that the employer pays the tax on the ...


2

1) Very closely than you would ever think of. Amazon has every details of every purchase I have made since the past 4 years, when I initially joined, and regularly spams me about stuff I may need. Yes they keep a database under some pretext or the other(to suggest stuff you may need to buy depending on your past activities), you can ask them for all the ...


2

It depends on what you're shopping for. Black Friday and Cyber Monday deals are often very good for some things and mediocre to downright bad for other things. I recommend trying to figure out what things you want to buy now, and tracking the price for 4-8 weeks. That will help give you a better price anchor to know when a deal is "good" vs. "not good".


2

Negative coupons are not the same as a negative yield. A $1000 bond that you purchase, at a premium, for $2100 that produces 10 annual coupons of $100 and a redemption of $1000 has a real, positive coupon ($100). The holder of the bond gets this coupon, and the maturity value However, you get back less than your initial investment. There is no growth; the ...


2

People borrow money all the time to buy a house. Banks will lend money on one (up to 80%, sometimes more), because they consider it an "investment." If you own a large company and want to expand, a bank or bond issuer will first look at what you plan to do with the money, like build new factories, or whatever. Based on their experience, they may judge that ...


2

One more scenario is when the company already has maturing debt. e.g Company took out a debt of 2 billion in 2010 and is maturing 2016. It has paid back say 500 million but has to pay back the debtors the remaining 1.5 billion. It will again go to the debt markets to fund this 1.5 billion maybe at better terms than the 2010 issue based on market conditions ...


2

It's important to understand this as an investor. There is a metric called "duration". It's the time weighted average of all the coupons and final payment you'd receive over the life of the bond. Logically, a zero coupon bond has the longest duration (equal to its maturity) vs one with coupons, given equal maturities. And the price impact is the change in ...


1

The coupons from the bonds the ETF holds go into the cash balance of the ETF. From there, it's up to the terms of the ETF whether to pay dividends (which may or may not correspond to the coupons it has received) or to reinvest the coupons internally. In other words, the coupons that the bonds held by the ETF pay are NOT distributed to you directly.


1

No, there are some bonds that can vary the coupon dates slightly. For example, they can be scheduled to be paid on the last day of the month (i.e. Dec 31st) or the last business day, etc. So you need to look at the specific terms of the bond, which should outline the exact payment schedule. From a rough valuation perspective, though, one or two days ...


1

Does par value include interest? No - that is the amount of "principal" that you receive when the bond matures. Interest that you receive from coupons on or before maturity is separate.


1

Your answer takes raises the daily interest rate to the 90th power. This compounds the daily interest daily for 90 days. 100/(1+0.06/365)^90 100/(1+0.000164)^90 // The daily interest rate is 0.000164 100/(1.000164)^90 100/1.014903 98.53 The textbook answer is simply 90 days of the daily interest rate with no compounding 100/(1+0.06/365*90) 100/(1+0....


1

The assumption that bonds have been issued with a negative coupon is not correct, or at least is has not occurred thus far. We'll look at this future possibility in the final paragraph. For now, lets look at the current bond market. The issuance of government bonds which carry a negative gross redemption yield is the result of governments issuing bonds at ...


1

It (usually) is better to use Other Peoples Money (OPM) than your own. This is something that Donald Trump has mastered. If you use OPM and something goes wrong you can declare bankruptcy and wipe out that debt. The Donald has done this more than once. At the fantastic low Intrest rates a company would be wasting resources if they only used their own money....


1

The best time to start holiday shopping is just after the holidays, when stores are selling off their remaining overstock. Outside of that, there's no one answer.


1

For a $100 semi-annual bond with a coupon rate of 11.250%, each coupon you receive will be $5.625 5.625% of $100, or $5.625 To find out why, let's analyze the cash flows of this bond: Principal: Bonds are always quoted assuming denominations of $100, so analysis is made easier if we pretend you are buying one bond with a face value of $100. As you know, ...


1

It seems to me the coupon is semiannual. You pay $105.10, and get a coupon of $5.62 in June along with your $100. So, you 'lost' $5.10, for a net .52, or .95%.


1

Very Interesting Math. Plain and Simple, it saves you $10.00. When 18% goes above $10 you loose the money, you save if it is (18% of the baae bill) is less than $10. This raises few questions: You are forced to give out 18% tips. You may wish to keep it at 10-15%. You have no choice. All thing considered, better to avoid such coupons. They force you to ...


1

You're calculating it exactly right. I wrote about this one on my blog a while ago. Lesson learned is that nothing comes for free, and you can take the saying "there are no free meals" quite literally in this case. edit To address the comments about tips... I don't believe tips should be compulsory. Its my reward to the server for outstanding service. Not ...


Only top voted, non community-wiki answers of a minimum length are eligible