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Olympic Sports has two issues of debt outstanding. One is a 9% coupon bond with a face value of $32 million, a maturity of 15 years, and a yield to maturity of 10%. 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 10%. The face value of the issue is $37 million, and the issue sells for 92% of par value. The firm's tax rate is 35%.
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 %
The nominal anchor _____. The Federal Reserve System was set up with 12 regional Federal Reserve banks because ___. A prevalant feature of debt contracts for both households and businesses is ___.
If an investor purchases shares in a no-load fund for $36, receives cash distributions of $1, and redeems the shares after one year for $42, what is the percentage return on the investment?
A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 5 years from now?
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