Compute payment made by eli lilly to retire original debt

Assignment Help Finance Basics
Reference no: EM131427425

When Eli Lilly, a major pharmaceutical company, chose to refinance some of its outstanding bonds payable, the company paid off the outstanding debt and replaced it with a new bond issuance. At the time of the refinancing, the balance sheet value of the outstanding debt was approximately $35 million. On the company's income statement a loss of $7.2 million (net of $4.8 million in tax benefits) was reported.

a. Compute the payment made by Eli Lilly to retire the original debt.

b. How did the company benefit from the $4.8 million tax effect?

c. Lilly uses the indirect method of presentation for the statement of cash flows. How was the loss treated on that statement?

d. How was the loss disclosed on the income statement?

Reference no: EM131427425

Questions Cloud

Analyze the major functions of the articular-nervous system : The articular is the connection between two bones. There are many functions the joints have but one of the main functions would be movement. The joints also help bear our body's weight as well as give us stability. The joints contain synovial flui..
Finalize your business plan for new hwe accessories website : Finalize your business plan for the new HWE Accessories website. Incorporate your instructor's feedback into a well-integrated, cohesive 5- to 10-page document using Microsoft Word including segments from Weeks Two, Three, Four, and Five.
Prepare the journal entry to record the redemption : Assume that the bonds were issued in 2009 for 102, and at the time of redemption they had a balance sheet value of $507,000. Prepare the journal entry to record the bond redemption.
How would the computer represent the integer : 1. Questions 1a through 1c are about a computer that represents integers in 16-bit, two's complement form. a. How would the computer represent the integer 7734? Your answer must be a binary (base 2) number, without a sign.
Compute payment made by eli lilly to retire original debt : Lilly uses the indirect method of presentation for the statement of cash flows. How was the loss treated on that statement?
What is the effective interest rate of the note : On January 1, 2012, Wilmes Floral Supplies borrowed $2,413 from Bower Financial Services. Wilmes Floral Supplies gave Bower a $2,500 note with a maturity date of December 31, 2013. The note specified an annual stated interest rate of 8 percent.
What are the issues of individual and cultural diversity : What are the issues of individual and cultural diversity a counselor must consider when using REBT and behavioral theories?
Create a marketing plan for inclusion into business plan : Assess which tools should be the most effective for promoting their specific new business ventures. Create a digital marketing plan for inclusion into the business plan.
Current political climate in the us : Given the current political climate in the US, what limits - if any - do you think there should be re: freedom of speech? What do you think of "hate speech" laws? Does "intent" matter (for example - if someone did not intend to incite violence but..

Reviews

Write a Review

Finance Basics Questions & Answers

  International aspects of financial management

Currently, you can exchange 100 for $132.66. The inflation rate in Europe is expected to be 3.1 percent as compared to 3.6 percent in the U.S.

  Its internal rate of return

Its internal rate of return

  Complexities of the us financial system

The U.S. financial system has many complexities, and it is impacted by several environmental factors, including federal regulations and the economy.

  A local bank to help them design a bond portfolio

You have been hired by a local  bank to help them design a bond portfolio to fund a $10 million pension obligation that will come due in 4 years. The managers of the bank would like to use a 2-year zero coupon bond along with an 8-year zero coupon bo..

  Are onion farmers as a group better off because of the ban

Onion futures have been prohibited ever since. Is it likely that banning trading futures contracts in onions reduced the volatility in onion prices? Are onion farmers as a group better off because of the ban?

  What will be the nominal rate of return on a preferred stock

What will be the nominal rate of return on a preferred stock with a $100 par value, a stated dividend of 8 percent of par, and a current market price of? (a) $60, (b) $80, (c) $100, and (d) $140?

  Calculate the price of a call and a put option

1. Calculate the price of a call and a put option with exercise price $10 and two periods on a stock whose initial price is $13. The stock can go up by 1.1 (u = 1.1), or down by 0.8 (d = 0.8), the risk free rate is 0.2% per period.

  What is the cash flow to stockholders during 2010

What is the operating cash flow during 2010? (Do not include the dollar sign.

  What would the approximate price of a stock be

What would the approximate price of a stock be if an average investor requires a return of 14% for an average stock, junk bonds are yielding 22% and 3 month T-Bills are yielding just 4.5%.

  Creating and backtesting successful investment strategies

The aim of this coursework is to give you the opportunity to demonstrate your ability to apply the knowledge acquired in this module, in the context of the real market data. The focus is on creating and backtesting successful investment strategies..

  Why are earnings announcements made in advance of the

why are earnings announcements made in advance of the release of financial statements? what information do they

  Computing expected dollar value

At the end of the year, a U.S. company has expected cash flows of ¥1,000,000 from Japanese operations, CHF200,000 from Swiss operations, and €350,000 euros from German operations.

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!

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