1. A bond has a $1,000 par value (face value) and a contract or coupon interior rate of 8%. A new issue would have a flotation cost of 5% of the market value. The bonds mature in 10 years. The firm’s average tax rate is 28% and its marginal tax rate is 39%. The current price is $1100. What is the after tax cost of debt?
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What is the total stockholders' equity based on the following account balances? Common Stock $450,000 Paid-In Capital in Excess of Par 90,000 Retained Earnings 190,000 Treasury Stock 10,000 Answer A.$740,000 B.$730,000 C.$720,000 D.$640,000
The 10% bonds payable of Klein Company had a net carrying amount of $570,000 on December 31, 2006. The bonds, which had a face value of $600,000, were issued at a discount to yield 12%. The amortization of the bond discount was recorded under the
Suppose a zero-coupon bond is selling for $614.00 today. It promises to pay $1,000 in exactly 10 years with annual compounding. What is the firm’s after-tax cost of debt if this is its sole debt outstanding (assuming the firm is in the 20% tax bracket)?
A 20-year, $1,000 par value bond has a 9% annual coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 5 years from now
Suppose a zero-coupon bond is selling for $614.00 today. It promises to pay $1,000 in exactly 10 years with annual compounding. Its annual rate of return would be about
what is the theme of the poem two bodies ? Whats the theme of this poem? Two bodies face to face are at times two waves and night is an ocean Two bodies face to face are at time two stones and night a desert Two bodies face to face are at times two roots
Nico Trading corporation is considering issuing long-term debt. The debt would have a 30 year maturity an a 10 percent coupon rate. In order to sell the issue, the bonds must be underpriced at a discount of 5 percent of face value. In addition, the firm
Heather bought a ten-year maturity corporate bond when it was issued for $1,000. The bond has an annual interest rate of seven percent and pays interest semi-annually. How much does she receive every six months?
The Garraty company has two bond issues outstanding. Both bonds pa $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years and Bond S a maturity of 1 year. A). What will be the value of each of these bonds when the going rate of
You buy an eight year bond that has a 6% current yield and a 6% coupon (paid annually). In one year, promised yields to maturity have risen to 7%. What is your holding period return?