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Bond interest payments before and after taxes Charter Corp. has issued 1,801 debentures with a total principal value of ?$1,801,000. The bonds have a coupon interest rate of 6?%.
A) What dollar amount of interest per bond can an investor expect to receive each year from? Charter?
B) What is? Charter's total interest expense per year associated with this bond? issue?
C) Assuming that Charter is in a 34?% corporate tax? bracket, what is the? company's net? after-tax interest cost associated with this bond? issue?
Molly Matters Inc. issues a split-coupon $1,000 bond that matures in seven years. Interest payments are $70 a year (7 percent) and start after three years have lapsed. The bond initially sells for a discounted price of $816.3. You are in the 30 perce..
A company's 5-year bonds are yielding 9.9% per year. Treasury bonds with the same maturity are yielding 5.15% per year, and the real risk-free rate (r*) is 2.65%. The average inflation premium is 2.1%, and the maturity risk premium is estimated to be..
You agree to lease a car for 5 years by paying $300 per month. You are not required to pay any money up front or at the end of your agreement. Your opportunity cost of capital is 6% APR (Annual Percentage Rate). What is the cost of the lease (Present..
Your firm is considering the following three alternative bank loans for $1,000,000: Assume that you would normally not carry any bank balance that would meet the 20 percent compensating balance requirement. What is the rate of annual interest on each..
The sales budget for your company in the coming year is based on a quarterly growth rate of 10 percent with the first-quarter sales projection at $225.8 million. In addition to this basic trend, the seasonal adjustments for the four quarters are 0, −..
An oil company is buying a semi-submersible oil rig for $20 million. Additionally, it will cost $1.5 million to move the oil rig to the oil-field and to prepare it for operations. If it is depreciated over five years using straight-line depreciation,..
Your firm has a line of credit with your local bank for $50,000. The loan agreement calls for interest of 9% with a 5% compensating balance requirement which is based on the total amount borrowed. What is the effective interest rate if you need $42,7..
Mary is going to receive a 34-year annuity of $9,900. Nancy is going to receive a perpetuity of $9,900. If the appropriate interest rate is 12 percent, how much more is Nancy’s cash flow worth (today)? (Enter rounded answer as directed, but do not us..
An investment offers a total return of 18 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 13 percent. What does Janice believe the inflation rate will be over the next year?
Acme Medical Supply Company desires a target operating income amount of $100,000, with assumption inputs as follows: Desired (target) operating income amount 5 $100,000, Unit price for sales 5 $80. Compute the required revenue to achieve the target o..
Emerson Equine Supplies earned $72,000 in 2012 and pad dividends of $44,640. The firm had equity of $150,000 at the beginning of the year. At the end of the year, the company had total assets of $195,000. During the year, the company sold no new equi..
You are considering investing in taxable bonds. You are in the 40% tax bracket. The bonds carry a 15% interest rate. What is the after-tax yield (interest rate) on the bonds?
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