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The Robinson Corporation has $62 million of bonds outstanding that were issued at a coupon rate of 11 3/4 percent seven years ago. Interest rates have fallen to 10 3/4 percent. Mr. Brooks, the vice-president of finance, does not expect rates to fall any further. The bonds have 14 years left to maturity, and Mr. Brooks would like to refund the bonds with a new issue of equal amount also having 14 years to maturity. The Robinson Corporation has a tax rate of 35 percent. The underwriting cost on the old issue was 2.8 percent of the total bond value. The underwriting cost on the new issue will be 2.1 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a 7.5 percent call premium starting in the sixth year and scheduled to decline by one-half percent each year thereafter. (Consider the bond to be 7 years old for purposes of computing the premium). Assume the discount rate is equal to the aftertax cost of new debt rounded to the nearest whole number.
What would be the aftertax cost of the call premium at the end of year 13 (in dollar value)? (Omit the "tiny_mce_markerquot; sign in your response.)
You are trying to compute the price of a preferred stock you are examining. This preferred stock has an yearly dividend of $5 per share and a par value of $30.
Research indicates that the 1,000,000 cars in your city experience unrecoverable losses of $250,000,000 every year from theft, collisions, etc.
Is the investment on global information systems justified and when you need to keep several aspects, such as cultural, political, social, and ethical concepts in mind when developing, implementing, and operating these systems.
A share of stock is currently selling for $31.80. If the anticipated constant growth rate for dividends is 6% and investors are seeking a 16% return, what is the dividend just paid?
Narrate the merits of opening more stores in same market area and Divide your answer into sections
Han Corporation sales last year were $395,000, and its year-end receivables were $52,500. The company sells on terms that call for customers to pay 30 days after the buy,
A stock has a beta of 1.05, the expected return on the market is 10% and the risk-free rate is 3.8%. Calculate the expected return on the stock
Marie's CFO has calculated the company's WACC as 7.83%. What is the company's cost of equity capital? Round your answer to two decimal places.
You put $200,000 in the bank today; if the annual interest rate paid by the bank is 20.5%, and you do not make any withdrawals for 20 years, what will be your balance at that time? (for any credit, show your work)
Jeremy Kohn is planning to invest in a 10-year bond that pays a 12 percent coupon. The current market rate for similar bonds is 9 percent. Assume semi-annual coupon payments.
Address and discuss the types of foreign exchange risk and strategies.
Would these three elements have different priorities if referring to an individual investor versus a mutual fund?
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