User Account

All Pages

Olympic sports has two issues of debt outstanding

Assignment Help Finance Basics
Reference no: EM131030286

Olympic Sports has two issues of debt outstanding. One is a 6% coupon bond with a face value of $28 million, a maturity of 15 years, and a yield to maturity of 7%. The coupons are paid annually. The other bond issue has a maturity of 20 years, with coupons also paid annually, and a coupon rate of 7%. The face value of the issue is $33 million, and the issue sells for 96% of par value. The firm's tax rate is 40%.

 

a.

What is the before-tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

 

  Before-tax cost of debt  %  

 

b.

What is Olympic's after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

 

  After-tax cost of debt  %  

Reference no: EM131030286

Questions Cloud

Pricing strategies of firms in various market structures : Predatory acts of firms are generally against the law in the United States. Specifically in terms of pricing strategies of firms in various market structures, however, it is possible for competing firms to work together to determine a solution benefi..
Seeds versus weeds is the process of organizations : Seeds versus weeds is the process of organizations choosing which potential innovative ideas to fund and which to ignore. What are some ideas on how to handle this? Give examples.
Describe style of leadership this decision reflects : Describe which framework the proponents of this move would use to support their statement that it be considered ethical. Describe which framework the opponents of this move would use to support their statement that it be considered unethical.
Find the values of the inductance l and the resistance r : Voltage v(t) = 4e-20tV for t > 0 is input to the circuit. The resultant current i(t) = -1.2e-20t - 1.5 A. The initial inductor current iL(0) = -3.5A. Find the values of the inductance L and the resistance R in the circuit.
Olympic sports has two issues of debt outstanding : Olympic Sports has two issues of debt outstanding. One is a 6% coupon bond with a face value of $28 million, a maturity of 15 years, and a yield to maturity of 7%. The coupons are paid annually. The other bond issue has a maturity of 20 years, with c..
Inflation-adjusted rate of return : What is your real (inflation-adjusted) rate of return if the inflation rate is 3%? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.)
Write an explanation of how the images relate to leadership : Write an explanation of how the images relate to leadership. Please clearly explain in detail why you think the image is related to the leadership concept you have chosen (in your own words).
Calculate the expected return for stock : Calculate the expected return for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Every organization adheres to certain cultural values : Our main topic for this week is corporate culture. Every organization adheres to certain cultural values. Sometimes they are obvious, sometimes not. Frankly, some values are good and some are not. Can you identify and comment on organizational values..

Reviews

Write a Review

Finance Basics Questions & Answers

  Growing importance of bank relationship management

Discuss about the growing importance of bank relationship management. Imagine you work in the corporate finance or treasury department of a medium-sized firm that often struggles with cash flow and liquidity.

  Evaluate the competitive environment of an industry

Is Porter's five-factor model the best framework to use to evaluate the competitive environment of an industry? Why or why not?

  The standard deviation

A stock has an expected return of 0.12 and a variance of 0.23. What is its coefficient of variation? How do I solve for the standard deviation?

  Which of the following is not normally regarded as being a

which of the following is not normally regarded as being a barrier to hostile takeovers?abnormally high executive

  Describe way the u.s. financial markets impact the economy

Briefly describe one (1) way the U.S. financial markets impact the economy, one (1) way the U.S. financial markets impact businesses, and one (1) way the U.S. financial markets impact individuals.

  As peculator purchases three stocks on the london stock

as peculator purchases three stocks on the london stock exchange.he estimates that the probabilities that each of these

  How might size and the book-to-market ratio of a stock

The article from your Web Field Trip discusses two factors-size and book-to-market ratio-as risk factors that should be considered. How might size and the book-to-market ratio of a stock be a proxy for risk? Explain your answer.

  Asset 1 returns are riskier than asset 2 returns

A.   Asset 1 returns are riskier than asset 2 returns.       True           False

  A publisher sells books to borders at 12 each borders

1.a publisher sells books to borders at 12 each. borders prices the book to its customers at 24 and expects demand over

  Identify a risky and a safe investment

Identify a "risky" and a "safe" investment and provide rationale to justify your choices. Also, discuss the trade-off of risk and reward between your two investments.

  Hot wings inc has an odd dividend policy the company has

hot wings inc. has an odd dividend policy. the company has just paid a dividend of 9.00 per share and has announced

  How does the treatment of owners equity

How does the treatment of owners equity

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