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Pangaea Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 30-year zero coupon bonds to raise the money. The required return on the bonds will be 6 percent. a. What will these bonds sell for at issuance? (Round your answer to 2 decimal places. (e.g., 32.16)) Issue price $ b. Using the IRS amortization rule, what interest deduction can the company take on these bonds in the first year? In the last year? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Interest deduction First year $ Last year $ c. Repeat part (b) using the straight-line method for the interest deduction. (Round your answer to 2 decimal places (e.g., 32.16)) Interest deduction $ d. Based on your answers in (b) and (c), which interest deduction method would Pangaea Corporation prefer?
IRS amortization rule or Straight-line method
Discuss the differences in merger practices between U.S. companies and companies in other countries. What changes are occurring in international merger activity, particularly in Western Europe and Japan?
Calculate The Greek Connections net working capital in 2012 and calculate the cash conversion cycle of The Greek Connection in 2012.
Jack and Jill determine that upon retirement, they will need to withdraw $70,000 annually at the end of each year for the next thirty years. They know that they can earn 4% each year on their investment. How much will Jack and Jill need in their reti..
Do you think the default risk premium will likely increase or decrease during the next 6 months? How do you think the yield curve will change during this time? Offer some logic or current reference(s) to support your answers.
A stock has a required return of 11%; the risk-free rate is 2.5%; and the market risk premium is 4%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 8%, what would happen to the stock's requi..
your team has been hired as the accountants for the village of aiu. your team is being asked to do the following please
The forecast for your firm indicates there's a 20% chance that Net Income will be $200,000, a 50% chance it will be $300,000, and a 30% chance it will be $400,000. Assume your firm is zero-growth and pays all its net income in dividends each year Als..
What are some of the government requirements imposed on a public corporation that are not imposed on a private, closely held corporation?
The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change.
You have just won the lottery. You will receive $2,510,000 today, and then receive 40 payments of $1,255,000 these payments will start one year from now and will be paid every six months. A representative from Greenleaf Investments has offered to pur..
Explain how purchase of the apple press might affect the company's revenue goals. Based on this information, explain whether Anthony's Orchard should invest in the apple press.
If the Friendly National Bank experiences a required reserves deficit, what actions can it take to be in compliance with the existing required reserves ratio?
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