Exactly enough money to fund exciting new project

Assignment Help Financial Management

Reference no: EM13875011

On-The-Bubble Corporation, a US company, plans to issue $100,000,000 in par value of new 10-year maturity, 0% coupon rate, senior unsecured bonds. The issue would be priced at 68-00 (68% of par value) and the $68,000,000 proceeds from this issue will be exactly enough money to fund an exciting new project.

What would be the yield on this 0% coupon rate, new 10-year maturity debt to investors (and, therefore, the cost of debt to On-The-Bubble Corporation) if it were to be issued at this 68-00 price? (A, B, C, or D?)

A. 13.854 % B. 13.894 % C. 13.932 % D. 13.973 %

Reference no: EM13875011

Questions Cloud

Identified and described a new law or regulation : Analyzed and described the news reports, statements in the public record, personal telephone or other interview data collected from the sponsor.

What modification should jackson supply company make : Compensation, Strategy, and Market Value Jackson Supply Company is a publicly owned fir. What modification, if any, should Jackson Supply Company make to its management compensation plan?

About the retirement supplement : My cousin Robert wishes to have $10,000 per year as a retirement supplement for 20 years (from age 65-85). He is now 40 years old. How much must he save each year for the next 25 years if he assumes that his savings will earn 12% annually?

Prepare a draft on law enforcement of mental illness : Prepare a draft on Law Enforcement De-Escalation of Mental Illness

Exactly enough money to fund exciting new project : On-The-Bubble Corporation, a US company, plans to issue $100,000,000 in par value of new 10-year maturity, 0% coupon rate, senior unsecured bonds. The issue would be priced at 68-00 (68% of par value) and the $68,000,000 proceeds from this issue will..

How jury nullification is used in relation to diversity : An explanation of the process and cases that have helped to control the systemic discrimination of the courts in this process. A discussion of how jury nullification is used in relation to diversity

About the business organizations : Business Organizations – Georgio’s Fashions is a business established in Little Rock, Arkansas. In each of the following situations, determine whether Georgio’s is a sole proprietorship, a general partnership, a limited partnership, a limited liabili..

Criminal justice paper - fingerprinting : Do a research paper about criminal technologies such as fingerprinting, the rights of privacy, criminal justice and constitutional protection

Bad debts expense is estimated : The following 2010 information is available concerning the Drake Company, which adjusts and closes its accounts every December 31:

User Account

All Pages