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Jiminy's Cricket Farm issued a 30-year, 7 percent semiannual bond 9 years ago. The bond currently sells for 88 percent of its face value. The book value of this debt issue is $102 million. In addition, the company has a second debt issue, a zero coupon bond with 12 years left to maturity; the book value of this issue is $61 million, and it sells for 58.5 percent of par. The company's tax rate is 30 percent. Requirement 1: What is the total book value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) Total book value of debt $ Requirement 2: What is the total market value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) Total market value $ Requirement 3: What is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Aftertax cost of debt %
What is the market value of the firm (equity plus debt) after the change in capital structure? d. What is the debt ratio after the change in structure? e. Who (if anyone) gains or loses?
discussion questionsquestion 1.in what way can real estate developers take advantage of the market for affordable
Masters Golf Products, Corporation, spent 3 years and $1,000,000 to develop its new line of club heads to replace a line that is becoming obsolete. To start manufacturing them, the company will have to invest $1,800,000 in new equipment.
Your required rate of return is 15 percent and your tax rate is 40 percent. What is the minimal amount you should bid per park?
if the fed decides to raise interest rates next year whta effect would risingrates have upon the following 1consumer
A bond closed at 102.25. The current yield is 10.4%. What is the annual interest?
Compute (i) the value of the firm, (ii) the price per share, and (iii) the number of shares outstanding after the capital structure change.
Find out the degree of operating leverage? If units sold rise from 8,000 to 8,500, what will be the rise in operating cash flow? What is the new degree of operating leverage?
The shareholders if XYZ Company has voted in favor of a buyout offer from ABC Corporation. Information about each firm is given here:
Do you feel that the three-stock portfolio is sufficiently diversified or does it still have risk that can be diversified away? Explain.
If a borrower promises to pay you $1,900 9 years from now in return for a loan of $1,000 today, what effective annual interest rate is being offered? A. 5.26% B. 7.39% C. 9.00% D. 10.00%
On August 19, 2004 Google issued its IPO of 19.2 million shares to the initial investors at $81.33 per share. The closing price of the stock that same day was $100.74. What was the dollar value of the underpricing associated with the Google IPO.
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