Homework #6E (Before and after-tax cost of debt financing)

​ Temple-Midland, Inc. is issuing a ​$1,000 par value bond that pays 7.5 percent annual interest and matures in 15 years. Investors are willing to pay ​$949 for the bond and Temple faces a tax rate of 32 percent. What is​ Temple's after-tax cost of debt on the​ bond?       Question content area bottom Part 1 The​ after-tax cost of debt is_____%

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Use the following to answer questions 4-7 (Round answers to the nearest dollar) The company issues 7.4%, 5-year bonds with a total face amount of $100,000. The market interest rate for bonds of similar risk and maturity is 7.6%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET (input your answers after you've completed the entire problem). 5. 7. will S expense? S payment? (rounded to nearest dollar). What is the issue price of the bond? (rounded to nearest dollar). When the company records the first interest payment, how much record company for interest. the (rounded to nearest dollar). What is the bond liability (carrying amount) after the first interest (rounded to nearest dollar). When the company records the second interest payment, how much will the company record for interest expense?

LL KatyDid Clothes has a $140 million (face value) 20-year bond issue selling for 103 percent of par that carries a coupon rate of 14 percent, paid semiannually. What would be KatyDid's before-tax component cost of debt? (Round your answer to 2 decimal places.) Cost of debt Type here to search F1 F2

You're considering an investment in 10-year, $1,000 face value bonds that pay 8.50% annually and sell for $1,033.55. If you do make the purchase, how much will you earn? Select one: O a. 8.00% O b. 8.50% Oc. 7.59% Od 8.25% Oe. 8.86% Clear my choice A

A $5,000 bond with a bond rate of 5% payable semi-annually was purchased for $4,500, kept for 10 years and redeemed at face value. What is the effective annual return on investment (ROI)? Express your answer as a percentage (do not include %), rounded to 3 decimal places, e.g., 10.235% is 10.235. 6.469 Integer, decimal, or E notation allowed

Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley Assume you are thinking about buying these bonds Answer the following questions a. Assuming interest is paid annually, calculate the values of the bonds if your required rates of return are as follows Microsoft, 7 percent, GE Capital, 15 percent, and Morgan Stanley 10 percent where 0 b. The bonds are selling for the following amounts Microsoft GE Capital Morgan Stanley $850 $738 $561 What are the expected rates of return for each bond? c. How would the value of the bonds change it (1) your required rate of notumn (r) increased 2 percentage points or (2) decreased 2 percentage points? d. Explain the implications of your answers in part (c) in terms of interest rate nsk, premium bonds, and discount bonds e. Should you buy the bonds? Explain a. If your required rate of return on the Microsoft bond is 7 percent, what is the value of the bond? (Round to the nearest cont) Review Coupon interest rate…

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✩ Question Completion Status: 1 3 2 4 Question 5 5 Click Submit to complete this assessment. Calculate values out to at least 6 decimal places before converting to percentage terms. Sandeep Singh purchased Alltech's 10-year, 4% bonds at a par 2 years ago. He notes the price has changed to 101.40 and he calculates the change is yield as: O A. 2.10%. OB. 0.20% O C.0.17%. A Click Submit to complete this assessment. Q

The current income is ? The investor would experience a Gain, Loss, or Neither? The total return on this investment is ​$?

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Use the following information about IGI security dealer.  Market yields are in parenthesis, and amounts are in millions.               Assets                                                                                       Liabilities and Equity             Cash                                                                       $10            Overnight Repos                                     $170             1 month T-bills (7.05%)                                     75            Subordinated debt             3 month T-bills (7.25%)                                     75            7-year fixed rate (8.55%                         150             2 year T-notes (7.50%)                                      50             8 year T-notes (8.96%)                                    100             5 year munis (floating rate)                     (8.20% reset every 6 months)                25            Equity                                                               15…

aa.2   Assumes Venture Healthcare sold bonds that have a ten-year maturity, a 12 percent coupon rate with annual payments, and a $1,000 par value. What would be the bonds value? Hint: Watch the Homework Hint video to figure out how to calculate this using Excel. Choice: $750 Choice: $1,000 Choice: $1,500 Choice: $2,000

Oberon, Inc., has a $45 million (face value) 12-year bond issue selling for 96 percent of par that pays an annual coupon of 8.45 percent, What would be Oberon's before-tax component cost of debt? (Round your answer to 2 declmal places.) Cost of debt 96 Mc 2Type here to search 五 7734

More time value of money practice problems.  How would you solve these using a financial calculator?   What values would you enter for N, I/YR, PV, PMT, and FV ?  Alternatly, how would you solve this using MS Excel ? (please show formulas) *assume corporate bonds pay 2x annually and have a FV on $1000 a) What is the PV of a 25-year corporate bond issued 8 years ago paying 5.75% when similar bonds today pay a 4.75%? What is the current yield?

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Use the following to answer questions 1 – 3 (Round answers to the nearest dollar) O Corp issues 5%, 20-year bonds with a total face amount of $1,000,000. The market interest rate for bonds of similar risk and maturity is 5%. Interest is paid annually. 1. $ How much will be paid in interest each interest payment? 2. $ (rounded to nearest dollar). What is the present value of the interest payments? 3. $4 What is the issue price of the bond?

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