User Account

All Pages

After- tax cost of capital for debt financing

Assignment Help Finance Basics
Reference no: EM131419909

Great Seneca Inc. sells $100 million worth of 23 year to maturity 6.69% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $980 for each $1000 bond. The firm's marginal tax rate is 40%. What is the after- tax cost of capital for this debt financing?

Round answer to two decimal places in percentage form

Reference no: EM131419909

Questions Cloud

Describe the cash conversion cycle : Describe some measures a firm can take to decrease its cash conversion cycle. Can the cash conversion cycle be negative? Explain.
What do you understand by the term team process : What do you understand by the term team process? Write a 3+ page, double-spaced paper, describing the five stages of team development.
Explain strategic planning for mergers and acquisitions : Strategic planning for mergers and acquisitions. Deciding to acquire a company or compete with it. Deciding to supplement consulting staff by outsourcing. Using training to develop employee skill.
What level of confidence did the pollsters use : A newspaper reports that the governor s approval rating stands at 65%. The article adds that the poll is based on a random sample of 972 adults and has a margin of error of 2.5%. What level of confidence did the pollsters use?
After- tax cost of capital for debt financing : Great Seneca Inc. sells $100 million worth of 23 year to maturity 6.69% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $980 for each $1000 bond. The firm's marginal tax rate is 40%. What is the after- tax cost of capita..
How many randomly selected adults must they test : Hearing this, some medical researchers decide to conduct a large-scale study, hoping to estimate the proportion to within 4% with 98% confidence. How many randomly selected adults must they test?
Determine the optimal level of inventory to maintain : "Every firm should use the EOQ model to determine the optimal level of inventory to maintain." Discuss the accuracy of this statement with respect to the form of the EOQ model presented in this chapter.
Economic order quantity model : Appliance for less is a local appliance store. It costs this store $19.13 per unit annually for storage, insurance etc. to hold microwave in their inventory. Sales this year are anticipated to be 562 units. each order costs $94. The company is uns..
How many should be sampled for a full investigation : To gauge the size of the problem, the agency first picks 60 cars and finds 9 with faulty emissions systems. How many should be sampled for a full investigation?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is jumbo juice’s cost of preferred stock

If the firm issues 10,000 shares of preferred stock at $50 per share, how much of the total value of the issue will the firm be able to use (receive)?

  Why does the market price per share

Explain how earnings per share, dividends per share, and book value per share are calculated, and what they mean. Why does the market price per share not equal the book value per share?

  Was the new mba a good hire

which is presented below, to determine the amount of cash Eastern Trading needs to hold in precautionary balances under its current decentralized system and the level of precautionary cash it would need to hold under a centralized system. Was the new..

  Crock hunters wishes to maintain a growth rate of 8 a year

crock hunters wishes to maintain a growth rate of 8 a year a debt-equity ratio of 0.45 and a dividend payout ratio of

  Nci-parent bonds from unaffiliated parties

At the beginning of the year, an 80 percent owned subsidiary acquired a parent's bonds from unaffiliated parties at a gain of $20,000.

  Determination of companies dso

Firm x has sales of 10 million per year, all on credit terms calling for payment within 30 days; and its accounts receivable is two million. Determine the company's DSO,

  How would the required return for equity holders change

If a company increases the ammount of debt financing in the company's capital structure, how would the required return for equity holders change? Expain why in more than 2 sentences.

  Its manufacturing cost approximates 35 percent of selling

average investment in accounts receivable. levine corporation has accounts receivable of 400000. its manufacturing cost

  What must the credit suisse strategist have been expecting

What must the Credit Suisse strategist have been expecting would happen to Abercrombie & Fitch's stock for this strangle strategy to be profitable?

  Calculate the 2009 operating margin, profit margin

Calculate the 2009 operating margin, profit margin, basic earning power (BEP), return on assets (ROA), and return on equity (ROE). What can you say about these ratios?

  As the rate of innovation increases companies face

as the rate of innovation increases companies face expanding productservice lines shorter product and service

  What recommendation would you offer the firms management

what recommendation would you offer the firms management with regard to this product?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd