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Suppose your company needs to raise $44 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and you’re evaluating two issue alternatives: A 8 percent semi-annual coupon bond and a zero coupon bond. Your company’s tax rate is 40 percent. a-1. How many of the coupon bonds would you need to issue to raise the $44 million? Number of coupon bonds a-2. How many of the zeroes would you need to issue? (Round your answer to 2 decimal places (e.g., 32.16)) Number of zero coupon bonds b-1. In 20 years, what will your company’s repayment be if you issue the coupon bonds? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Coupon bonds repayment $ b-2. What if you issue the zeroes? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Zeroes repayment $ c. Calculate the after tax cash flows for the first year for each bond
ICU inc is a maker of one-way security mirrors for the security industry. The President Seymour Dan Others needs to build a new plant to meet increasing demand.
The Poseidon Swim company produces swim trunks. The average selling price for one of their swim trunks is $38. The variable cost per unit is $25. Poseidon swim has average fixed costs per year of $35,194.
Prepare and submit a consultancy report to the management of Anthony's Orchard, the company studied throughout this module. The company is considering expanding its product line to include apple juice.
A project is expected to produce cash flows of $5,000, $8,000, and $16,000 over the next three years, respectively. After three years, the project will be discontinued. What is this project worth today at a discount rate of 15 percent?
What is the financial leverage effect and what causes it? What are the potential benefits and negative consequences of high financial leverage?
money market securities are debt securities that have a one year or less maturity and are issued by the treasury
Financial Analysis (called Security Analysis on Wall Street) can be less than totally objective. How big a problem do you think this is? What can be done to manage potential conflicts of interest? Maybe we just have to live with it and search out ..
Calculate Eco s current after-tax cost of long-term debt, calculate Eco s current cost of preferred stock
An investment of $1,011,000 today yields positive cash flows of $200,000 each year for years 1 through 10. MARR is 12%. Determine the DPBP of this investment
A municipal bond has 5 years until maturity and sells for $5,156. If the coupon rate on the bond is 5.88 percent, what is the yield to maturity? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
It is time for you to finalize your findings for your boss. He is expecting your analysis of your division's operations and to produce a plan to improve operations with an eye for reducing costs.
You invested $105,000 in a mutual fund at the beginning of the year when the NAV was $48.63. At the end of the year the fund paid $.43 in short-term distributions and $.60 in long-term distributions. If the NAV of the fund at the end of the year was ..
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