AC will be issuing bonds with a total face value of P10,000,000 at an issue price of P9,900,000. It will incur issuance cost of P600,000. The bonds have a term of 10 years and a coupon rate of 12% payable quarterly. If the tax rate is 30%, what is the effective cost of the bonds using the interpolation method?
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AC will be issuing bonds with a total face value of P10,000,000 at an issue price of P9,900,000. It will incur issuance cost of P600,000. The bonds have a term of 10 years and a coupon rate of 12% payable quarterly. If the tax rate is 30%, what is the effective cost of the bonds using the interpolation method? Use increments of 1%.
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- A company is planning to issue perpetual, callable bonds with a coupon rate of 8% paid annually, and a par value of $1,000. The nominal interest rate on these bonds will be 9% for the next year. In one year, the nominal rate on the bonds will be either 10% with probability 0.6, or 8% with probability 0.4. The bonds are callable at $1200. Assuming the bonds are called if the interest rate decreases, what is the price of the callable bond today?Mobistar intends to issue callable, perpetual bonds with annual coupon payments. The bonds are callable at €12,500. One-year interest rates are 6 per cent. There is a 60 per cent probability that long-term interest rates one year from today will be 9 per cent, and a 40 per cent probability that long-term interest rates will be 4 per cent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value? Kindly provide explanation with your formula and calculationsAn MNC issues ten-year bonds denominated in 1,000,000 Mexican pesos at par. The bonds have a coupon rate of 13 percent. If the peso depreciates from $0.06 to $0.05 over the lifetime of the bonds, and if the MNC holds the bonds until maturity, what will the financing cost to the MNC be?
- Melekom Berhad has 16 years to maturity bond with a RM1,000.00 par value.The bond pays RM7S.00 a year in interest and is selling for RMSSO.OO. Thecompany's tax rate is 25%.Calculate the approximate yield to maturity and the after tax cost of debt.XYZ Co. is planning to issue stripped bonds with a face value of $100 and maturity of 10 years. What is the price of each stripped bond if the yield to maturity on similar bonds is 5.5% compounded semi-annually?The company wants to sell a Php 69,000,000 worth of bonds with a maturity of 25 years. The coupon rate for the bond is 9.5% and it will be paid annually. The company plans to sell the bond for Php975 per Php1,050 bond. Other cost directly attributable to selling the bond is Php20. What is the cost of debt before tax using the approximating cost formula?
- The Mills Company had issued a bond 10%, 10 year bonds with a face value of P1,000 each and paying a semi-annual interest payment at a required return of 12%. Required: Compute for the following: How much investor would be willing to pay for them? Approximate yield on the bonds;Twalilwisha Limited has issued bonds with a face value of K100, which pay a coupon rate of 6%. Coupon payments are payable semi-annually. The yields on similar bonds are currently 8% per year. The maturity date is in 10 years’ time.(i) What is the value of each bond? (ii) What is the bonds annual effective rate?Bandon Manufacturing intends to issue callable, perpetual bonds with annual coupon payments and a par value of $1,000. The bonds are callable at $1,255. One-year interest rates are 8 percent. There is a 60 percent probability that long-term interest rates one year from today will be 9 percent, and a 40 percent probability that they will be 7 percent. Assume that if interest rates fall the bonds will be called. What coupon rate should the bonds have in order to sell at par value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate %