D21567ABfxCDEFGH8Price per share9Shares outstanding8,000,00022.00Face value of outstanding bond issue $ 40,000,00010Coupon rate on bonds10%11Maturity of bonds1712Price of bonds (% of par)94.0013Weighted-average tax rate34.00%14Next expected dividend3.0015Expected dividend growth rate5.00%16171819Complete the following analysis. Do not hard code values in your calculations.2021Before-tax cost of equity22Before-tax cost of debt232425Equity weightDebt weightWACC2627

Before-tax cost of equity18.64%Before-tax cost of debt7.55%Equity weight82.40%Debt…

Answered: D21 5 6 7 A B fx C D E F G H 8 Price…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Problem 14-24 Calculating the Cost of Debt (LO3) Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 2 3 4 Coupon Rate 6.00 % 7.50 7.20 6.80 Price Quote 103.42 110.74 110.09 102.99 Cost of debt Maturity 5 years 8 years % 15.5 years 25 years Face Value $ 45,000,000 40,000,000 If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) 50,000,000 65,000,000
$1,000 par value zero-coupon bonds (ignore liquidity premiums) Bond Years to Maturity Yield to Maturity 6.00% 7.50% 7.99% ABCDE Multiple Choice O 12345 The expected 2-year interest rate 3 years from now should be O 2 9.55% 11.74% 14.89% 8.49% 10.70% 13.73%
3 20 21 22 File Edit View Insert Format A 26 25 28 7 100% |fx| Coupon rate (paid annually 3936 ) Face valu Maturity YTM Diff -| $ + E Sheet1 - Data Data Tools Help % .0 .00 123- TEY After Tax Y 3. What price should the municiple bond trade at in order to have a YTM 70 basis points above the treasury bond of the same maturity. Assume a 35% tax rate Show your calculations Muni Bond Price Answered 35 30....html 141/151 B 10 secs left C Type here to search Treasury Bond Price Coupon rate (paid semi annually 5% ) 1000 Face value 5 Maturity Default (Ca... 1150 6% 1000 Last edit was 4 minutes ago E 2.767% F Treasury + 70bps spread BISA Ᏼ Ꮖ Ꭶ Ꭺ 4. At what tax rate will an investor be indifferent between the below bonds, assuming the municiple bond is insured against default? Show your calculations H E ♥ 1 B-=-¹ L G 60°F Mostly cloud
J 9. 50. 51. 52. 53. 54. 55. % 15 5 coupon Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual that is paid semiannually. The bond currently sells for $875, and the company's tax rate is 25%. What is the component cost of debt for use in the WACC calculation? Do not round your intermediate calculations. a. 6.69% b. 6.22% O c. 4.15% O d. 3.83% Oh. 8.29% T G Q Search B f6 40 6 D Y H & N U J fg * 4+ 8 M fg K MOC hp KAA 9 f10 L alt 25 f11 ctrl ? a f12 [ + W < ins prt sc ] ← pause X delete backspace V home enter num lock T shift 7 home end +↓ 3:5 11/1/ 1 end
11 3 N Pont You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2022. The bonds have a par value of $2,000 and semiannual coupons. Company (ticker) Xenon, Incorporated (XIC) Kenny Corporation (KCC) Hilliams Company (HICO) Coupon 7.200 7.300 77 Coupon rate Maturity January 15, 2039 January 15, 2033 January 15, 2035 Last Price Last Yield. 94.399 77 94.915 ?? 6.38 7,20 Estimated S Volume (0000) 57,380 48,959 43,820 What is the coupon rate for the Williams Company bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.
J 3 I got 10.01% for part a.
$1,000 par value zero-coupon bonds (ignore liquidity premiums) Bond Years to Maturity 1 A B Yield to Maturity 6.00% 7.50% C 8.00% D 4 8.50% E 5 10.25% The expected 1-year interest rate 2 years from now (f) should be 2 3
Excel Online Structured Activity: Bond valuation An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 9.4%. Bond C pays a 10% annual coupon, while Bond Z is a zero coupon bond. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet Assuming that the yield to maturity of each bond remains at 9.4% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Do not round intermediate calculations. Round your answers to the nearest cent. Years to Maturity Price of Bond C 4 3 2 1 0 $ $ $ $ $ Price of Bond Z $ $ $ $ $
Vijay
General Maiter%u2019s outstanding bond issue has a coupon rate of 10.6%, and it sells at a yield to maturity of 8.70%. The firm wishes to issue additional bonds to the public at face value. What coupon rate must the new bonds offer in order to sell at face value? (Round your answer to 2 decimal places.) Coupon rate %
8 9 10 11 12 13 14 15 16 17 18 19 YTM TEY Face valu Maturity YTM TEY After Tax Y 2. Which bond would an investor with in the 28% tax bracket prefer, assuming the municiple bond is insured against default? Show your calculations and explain. Muni Bond Price Coupon rate (paid semi annually + E Sheet1 OphpYfZe9p.png e Type here to search Treasury Bond 101 Price Coupon rate (paid semi annually 2% 100 Face value 10 Maturity ) image.png 102 TEY 100 10 10 E TEY M Z W ***** S SUR G X

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