What is the company total book value-market value

Assignment Help Financial Management
Reference no: EM131350580

Jiminy’s Cricket Farm issued a bond with 20 years to maturity and a semiannual coupon rate of 8 percent 3 years ago. The bond currently sells for 96 percent of its face value. The company’s tax rate is 35 percent. The book value of the debt issue is $40 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years left to maturity; the book value of this issue is $40 million, and the bonds sell for 52 percent of par.? What is the company's total book value, market value, and what is your best estimate of the aftertax cost of debt?

Reference no: EM131350580

Questions Cloud

Cost of common stock for whitewall : Whitewall Tire Co. just paid an annual dividend of $1.20 on its common shares. If Whitewall is expected to increase its annual dividend by 6.10 percent per year into the foreseeable future and the current price of Whitewall’s common shares is $16.98,..
Is the ebay in strong financial position : Is the eBay in a strong financial position? Explain. Basically, you need to analyze what all of the ratios, when taken as a whole, tell us about the overall financial health of the company.
What will be the forecast for year-end net income : Looking ahead to the following year, the company's CFO has assembled this information: Year-end sales are expected to be 11% higher than the $3 billion in sales generated last year. The tax rate is expected to remain at 40%. On the basis of that info..
Account balance in his traditional : Assume that Alex is 74 years old at the end of year tired, and that his marginal tax rate us 25 percent his account balance in his traditional 401k was 1,250.000 at the end of last year. what is the minimum distribution Alex must receive from his 401..
What is the company total book value-market value : Jiminy’s Cricket Farm issued a bond with 20 years to maturity and a semiannual coupon rate of 8 percent 3 years ago. The bond currently sells for 96 percent of its face value. The company’s tax rate is 35 percent. The book value of the debt issue is ..
Valued at for purposes of the capital budgeting analysis : Your company purchased a piece of land five years ago for $150,000 and subsequently added $175,000 in improvements. The current book value of the property is $225,000. In consideration of the factory project, what amount (if any) should the land be v..
Offer does not affect carry-alls other planned operations : Carry- all plans to sell 1300 carriers next year and has budgeted sales of $46,000 and profits of $22,000. variable cost are projected to be $20 per unit. micheal company offers to pay $20,800 to buy 600 units from carry-all. total fixed cost are 700..
What is the market risk premium : The market has an expected rate of return of 11.2 percent. The long-term government bond is expected to yield 5.8 percent and the U.S. Treasury bill is expected to yield 3.9 percent. The inflation rate is 3.6 percent. What is the market risk premium?
Business in industry in which it currently does not operate : Why company choose to merge with or acquire another company to expend its business in an industry in which it currently does not operate?

Reviews

Write a Review

Financial Management Questions & Answers

  Bond prices and interest rates move in the same direction

"Everything else held constant, the market price of a discount bond will increase and approach the bond's par value as the maturity date approaches." "Bond prices and interest rates move in the same direction, i.e., if interest rates rise, so will bo..

  Required return differs from the coupon interest rate

Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 14%, and the company is certain it will remain at 14% until the bond matures in 15 years.

  Which are incremental cash flows

To help distinguish opportunity costs and incremental cash flows, consider these four examples: Which of these are opportunity costs? Which are incremental cash flows?

  Executor makes the specific bequests

Joe's estate consists of $500,000. His will makes the following bequests: $10,000 to his sister, Sally, $20,000 to his nephew Alex, and the rest of his estate to his mother, Carolyn. During the first year of the administration of his estate, his esta..

  Estimate the daily volatility

Suppose that observations on a stock price (in $) at the end of each of 15 consecutive days are as follows: Estimate the daily volatility

  Activitys optimistic-most likely and pessimistic time

Given an activity's optimistic, most likely, and pessimistic time estimates of 50, 66, and 74 days respectively, compute the PERT expected activity time for this activity.

  Expected return of the portfolio

Stock C has an expected return of 10% and standard deviation of 25%. Stock D has expected return of 14% and standard deviation of 32%. Seventy-five percent of the portfolio is invested in C and the rest is invested in D. What is the expected return o..

  What is the conclusion of this argument

What is the conclusion of this argument? If sea levels rise dramatically then some low islands are at danger of disappearing. The Maldives are coral islands in the Indian Ocean none of which are more than six feet above sea level.

  What is their yield to call

Sadik Inc.'s bonds currently sell for $1,270 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)?

  Evaluate the two proposed alternatives regarding the

straight supply is a major supplier of medical components to large pharmaceutical corporations. bonnie straight is a

  Portfolio equally invested in risk-free asset and two stocks

You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.16, and the total portfolio is exactly as risky as the market, what must the beta be for the other stock in your portfolio?

  What is the required return for the winter time stocks

Winter Time Adventures is going to pay an annual dividend of $2.86 a share on its common stock next year. This year, the company paid a dividend of $2.75 a share. The company adheres to a constant rate of growth dividend policy. If the current stock ..

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