The after-tax cost of debt is what percent

Assignment Help Financial Management
Reference no: EM13850376

A bond that has a $1000 par value (face value) and a contract or coupon interest rate of 11.2 percent. Interest payments are $56.00 and are paid semiannually. The bonds have a current market value of $1128 and will mature in 10 years. The firm marginal tax rate is 34 percent. The after-tax cost of debt is what percent?

Reference no: EM13850376

Questions Cloud

Computing interest tax savings : (Computing interest tax savings) Dharma Supply has earnings before interest and taxes(EBIT)of $531,000, interest expenses of $313,000, and faces a corporate tax rate of 36 percent. What would Dharma's net income be if it didn't have any debt (and con..
Record the entry for the issuance of the bonds : Dillard Co. issued $20,000,000 of 5-year, 14% callable bonds on April 1, 2014, at a market rate of 12%. Interest is payable semi-annually on September 30 and March 31. Record the entry for the issuance of the bonds. Record the entries for interest pa..
After tax-cost of debt : A bond that has a $1000 par value (face value)and a contract or coupon interest rate of 11.2 percent. Interest payments are $56.00 and are paid semiannually. The bonds have a current market value of $1128 and will mature in 10 years. The firm margina..
What is the market value of the companys debt : Bennington Industrial Machines issued 151,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.1 percent. Interest rates have recently increased, and the bonds now have a yield to maturity ..
The after-tax cost of debt is what percent : A bond that has a $1000 par value (face value) and a contract or coupon interest rate of 11.2 percent. Interest payments are $56.00 and are paid semiannually. The bonds have a current market value of $1128 and will mature in 10 years. The firm margin..
Stock portfolio invested : You own a stock portfolio invested 30 percent in Stock Q, 20 percent in Stock R, 30 percent in Stock S, and 20 percent in Stock T. The betas for these four stocks are .89, 1.22, 1.06, and 1.24, respectively. What is the portfolio beta?
Risk for high medical expenditures : The law now gives a worker who becomes unemployed the right to buy continuing health insurance coverage after leaving the company. Why might it be rational for a factory worker who loses his or her job to give up this legal right to purchase coverage..
Explain the cash conversion cycle and net working capital : Explain the cash conversion cycle (CCC) and net working capital. Why is this important to the contemporary executive? How do executive decisions regarding CCC and net working capital affect the company?
It cost you to buy seat if company uses straight votind : After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only person voting for you. If Schenkel has 445,000 shares out..

Reviews

Write a Review

Financial Management Questions & Answers

  Arithmetic and geometric returns for the stock

A stock has had returns of 11 percent, 29 percent, 16 percent, −17 percent, 29 percent, and −7 percent over the last six years. What are the arithmetic and geometric returns for the stock?

  What is the companys cost of equity capital

The Zombie Corporation’s common stock has a beta of 1.3. If the risk-free rate is 4.4 percent and the expected return on the market is 10 percent, what is the company’s cost of equity capital?

  About the promotion and raise

In September, Ricardo Castíllo got a promotion and a raise. Because his monthly expenses did not increase very much, Ricardo was able to save more dollars. He saved $1,070, which was 40% of his new salary. How much was Ricardo's new salary?

  Hedging strategies

Hedging strategies are

  About what would be your annual payment

You have purchased a house for $190,000. A bank will make you a loan at 4% interest for 30 years with annual payments. About what would be your annual payment?

  What is the projects operating cash flow

The financial staffs of Cairn Communications have identified the following information for the first year of the roll-out of its new proposed service. What is the project's operating cash flow for the first year (t=1)?

  Evaluating value of long-term elements of capital

evaluating value of long-term elements of capital structureassignmentyou are interested in suggesting a new venture to

  Determine the firms current earnings per share

Security Data Company has outstanding 50,000 shares of common stock currently selling at $40 per share. The firm most recently had earnings available for common stockholders of $120,000, but it has decided to retain these funds and is considering eit..

  The market interest rate

Your child (John) has come to you for advice. He is about to enter college and has two options open to him. His first option is to study petroleum engineering. If he does this, his undergraduate degree would cost him $20,000 a year for four years. Wh..

  Calculate the yield using a geometric average

Interest rates on 4-year Treasury securities are currently 6.6%, while 6-year Treasury securities yield 7.3%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate..

  Most basic type of capital expense risk

_________ is the most basic type of Capital Expense Risk, not taking into account the effects of the portfolio.  ________ is an integral part of the Free Cash Flow Calculation, and is also known as a non-cash expense.

  About the cash conversion cycle

Negus Enterprises has an inventory conversion period of 80 days, an average collection period of 47 days, and a payables deferral period of 40 days. Assume that cost of goods sold is 80% of sales. What is the length of the firm's cash conversion cycl..

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