Suppose now the book value of the debt issue is 50 million

Assignment Help Finance Basics
Reference no: EM13622363

Moldova Beef Farm issued a 25-year, 9 percent semi-annual bond 7 years ago. The bond currently sells for 108 percent of its face value. The company's tax rate is 35 percent. What is the pretax and after-tax cost of debt? Which is more relevant, the pretax or the after-tax cost of debt? Why?

Suppose now the book value of the debt issue is 50 million. In addition, the company has a second debt issue on the market, a zero coupon bond with seven years left to maturity; the book value of this issue is 170 million and the bonds sell for 58 percent of par.

What is the company's total book value of debt? The total market value? What is your best estimate of the after-tax cost of debt now?

Reference no: EM13622363

Questions Cloud

A firm with a corporate wide debt-to-equity ratio of 13 an : a firm with a corporate wide debt-to-equity ratio of 13 an after tax cost of debt of 5. the risk free rate is 3 and the
Is there a statistically significant difference in the : a clinical trial is run to investigate the effectiveness of an experimental drug in reducing preterm delivery to a drug
In may 1988 walt disney productions sold to japanese : in may 1988 walt disney productions sold to japanese investors a 10- year stream of projected yen royalties from tokyo
Is there a statistically significant difference in the : a clinical trial is run to investigate the effectiveness of an experimental drug in reducing preterm delivery to a drug
Suppose now the book value of the debt issue is 50 million : moldova beef farm issued a 25-year 9 percent semi-annual bond 7 years ago. the bond currently sells for 108 percent of
A parallel-plate capacitor consists of two parallel square : a parallel-plate capacitor consists of two parallel square plates that have dimensions 1.0 cm by 1.0 cm. if the plates
A racetrack has the shape of an inverted cone on this : a racetrack has the shape of an inverted cone. on this surface the cars race in circles that are parallel to the ground
The steiners decided to provide additional financial : 1. what are the deficiencies in the presentation of the statement of financial position?2. the steiners decided to
The lift coefficient at this speed is 045 and the drag : an aircraft is in level flight at 225 kmhr through air at standard conditions. the lift coefficient at this speed is

Reviews

Write a Review

Finance Basics Questions & Answers

  What is effect of a distribution on accumulated e&p

What is Effect of a distribution on accumulated E&P and current E&P and explain the effect of a distribution in a year when the distributing corporation has any of the following

  Identifying best method of finance

Alpha Waffles need to expand & increase their market share by 40 percent in the next 2 years. They would need to improve their packaging & spend money on advertising.

  Suppose the spot rate of the pound today is 170 and the

1. suppose the spot rate of the pound today is 1.70 and the three-month forward rate is 1.75.a. how can a u.s. importer

  Marcia stubern is planning for her golden years she will

marcia stubern is planning for her golden years. she will retire in 20 years at which time she plans to begin

  Which organizational officer is directly responsible

Which organizational officer is directly responsible for managing a company's cash and funds invested in various marketable securities?

  Computing payments

The Peking Duck Company buy from suppliers in a quarter are equal to 60% of the next quarter's forecast sales. The payables deferral period is 60 days.

  Prepare journal entry to record the accrual of interest

Kingston Satellites issued $3,600,000 face value, 9 percent, ten year bonds at $3,375,680. This price resulted in an effective-interest rate of 10 percent on the bonds.

  Te firm can borrow at 9 if the corporate tax rate is 35

old school corporation expects an ebit of 12000 every year forever. old school currently has no debt and its cost of

  Finding the transfer price in different situationsharpoon

finding the transfer price in different situations.harpoon inc. is a u.s. multinational corporation that ships small

  Then 5 months before maturity sue sellsthe note to b

marilyn borrows 600 from sue on february 14 2010 for 11 months at11.5 simple interest. then 5 months before maturity

  What is the annual ocf for the project

Variable costs are 56 percent of sales, depreciation on the equipment to produce the new board will be $1,510,000 per year, and fixed costs are $1,410,000 per year.

  What was keys last dividend

Keys Inc's stock has a required rate of return of 10%, and it sells for $40 per share. Keys' dividend is expected to grow at a constant rate of 7% per year. What was Keys' last dividend, D0? Show your work and/or inputs used on financial calculato..

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