Hmk enterprises would like to raise 10 million to invest in

Assignment Help Accounting Basics
Reference no: EM13586609

HMK Enterprises would like to raise $10 million to invest in capital expenditures. The company plans to issue five-year bonds with a face value of $1000 and a coupon rate of 6.5% (annual payments). The following table summarizes the yield to maturity for five-year (annual-pay) coupon corporate bonds of various ratings:

a.Assuming the bonds will be rated AA, what will the price of the bonds be?

b. How much total principal amount of these bonds must HMK issue to raise $10 million today, assuming the bonds are AA rated? (Because HMK cannot issue a fraction of a bond, assume that all fractions are rounded to the nearest whole number.)

c. What must the rating of the bonds be for them to sell at par?

d. Suppose that when the bonds are issued, the price of each bond is $959.54. What is the likely rating of the bonds? Are they junk bonds?

Reference no: EM13586609

Questions Cloud

Do some research and find an article that discusses the : do some research and find an article that discusses the lack of proper internal controls. discuss how you think the
Calculate the amount of depreciation for 2012 using : mike purchases a heavy-duty truck 5-year class recovery property for his delivery service on april 30 2012. the truck
Ashing burns off the organic matter in a sample leaving : calcium in powdered milk is determined by ashing a 1.4983-g sample and then titrating thecalcium with edta solution
When refering to a statement of cash flows why would : when refering to a statement of cash flows why would managers compare the net cash provided by operating activities to
Hmk enterprises would like to raise 10 million to invest in : hmk enterprises would like to raise 10 million to invest in capital expenditures. the company plans to issue five-year
Calculate the velocity of the puck magnitude and direction : question a 0.160-kg hockey puck is moving on an icy frictionless horizontal surface. at t 0 the puck is moving to the
Describe how to make 50 ml of the following 10x gel : describe how to make 50 ml of the following 10x gel electrophoresis loading buffer 100 mm edta ph 8.0 0.1 wv
What is the net present value of a 25000 payment 3 years : what is the net present value of a 25000 payment 3 years from now assuming a cost of captial of 12 precent?what is the
Madrid co has a direct labor standard of 4 hours per unit : madrid co. has a direct labor standard of 4 hours per unit of output. each employee has a standard wage rate of 11 per

Reviews

Write a Review

Accounting Basics Questions & Answers

  Computing variuos accounting measures

Sawaya Company had depreciation and amortization expenses of $522,311, interest expenses of $114,077, and an EBITDA of $1,521,087 for the year ended June 30, 2010. What is the Times Interest Earned for this company?

  Company period-ending inventory

She also has another 250 units in her van, ready to deliver per a customer order, terms FOB destination, and another 70 units out on consignment to a friend who owns a retail store. How many units should Jenny include in her company's period-endin..

  Jan richards is in charge of the testing laboratory for

jan richards is in charge of the testing laboratory for southwest chemicals inc. she is investigating the possibility

  For 2013 fielder corporation reported net income of 30000

for 2013 fielder corporation reported net income of 30000 net sales 400000 and average common stock shares outstanding

  Statement of cash flows indirect method and direct method

statement of cash flows indirect method and direct method. the net changes in the balance sheet accounts of keating

  Concept of unit contribution margin

If fixed costs are $700.000 and the unit contribution margin is $14, what amount of units must be sold in order to realize an operating income of $100.000

  How would you describe communal balance in the professional

your responses to the questions below should be composed in complete sentences. your option 2 response should be a

  Calculate the maximum depreciation expense

During April of the current year, Ronen purchased a warehouse that he used for business purposes. The basis was $1,600,000. Calculate the maximum depreciation expense during the current year?

  John borrowed 320000 on april 1 the note requires interest

john borrowed 320000 on april 1. the note requires interest at 12 and principle to be paid in one year. how much

  Income statement prepared for business enterprise

Use by customers to determine a company"s ability to provide needed goods and services. 21. Which of the following would represent the least likely use of an income statement prepared for a business enterprise?

  What are the amt tax preferences

Caroline and Clint are married, have no dependents, and file a joint return in 2005. Use the following selected data to calculate their Federal income tax liability. What is the AMTI? What is the regular income tax liability? What are the AMT tax ..

  Reflect fair market value

Many non-accounting types argue that the cost concept is of little value because it does not reflect fair market value. What do you think?

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