**Ratings Table:**| Company | Moody's Rating and Date | Standard and Poor’s Global Rating and Last Reviewed Date ||---|---|---|| DLTR | Baa207 July 2023 | BBB19 January 2023 || TGT | A229 March 2023 | A16 March 2023 |**b. Explanation:**Explain what the ratings mean based on each agency's credit rating. Based on the ratings, which company would you invest in for the company's long-term debt issuance? Why?

Credit ratings are evaluations of a company's creditworthiness and the probability that it will be…

DLTR TGT Moody's Rating and Date Baa2 07 July 2023 A2 29, March 2023 Standard and Poor's Global Rating and last Reviewed Date BBB 19 January 2023 A 16, March 2023 b. Explain what the ratings mean based on each agencies credit rating. Based on the ratings which company would you invest in the company's long term debt issuance? Why?

DLTR TGT Moody's Rating and Date Baa2 07 July 2023 A2 29, March 2023 Standard and Poor's Global Rating and last Reviewed Date BBB 19 January 2023 A 16, March 2023 b. Explain what the ratings mean based on each agencies credit rating. Based on the ratings which company would you invest in the company's long term debt issuance? Why?

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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Examplify SM132 Final Exam Spring 2021 - Tuesday May 4 7PM | SEOE HONG TIME REMAINING EXAM CONTROLS TOOL KIT : FILTER > Question 15 FLAG QUESTION 11 Rating AAA AA A ВВВ 12 Yield 0.80% 1.60% 2.20% 3.20% 13 Given the table above which shows typical yields for 5 year bonds of varying credit ratings, what is the most likely credit rating of your company if your 5-year, semiannual bonds with a face value of $5,000 and a coupon rate of 5% are trading at a price of $5,412.81? 14 15 Answers A - D А A BBB СА D AAA Previous IONS VERSION 2M.6.4
Briefly explain the rating scales for the 3 credit agencies as shown below, including the terms and indications for each part of the figure.
Introduction and explanation and show work without plagiarism please
48 The Sunland Products Co. currently has debt with a market value of $300 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) which have a maturity of 15 years and are currently priced at $1,434.63 per bond. The firm also has an issue of 2 million preferred shares outstanding with a market price of $10 per share. The preferred shares pay an annual dividend of $1.20. Sunland also has 14 million shares of common stock outstanding with a price of $20.00 per share. The firm is expected to pay a $2.20 common dividend one year from today, and that dividend is expected to increase by 5 percent per year forever. If Sunland is subject to a 40 percent marginal tax rate, then what is the firm's weighted average cost of capital? Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen…
How do you solve for the rate of return using the yield to maturity formula?
470 -37 Assume that the dividend payout ratio will be 55 % when the rate on long term government bonds falls to 9%. Since investors are becoming more risk averse, the equity risk premium will rise to 8% and investors will require a 7% return. The return on equity will be 13%. What is your expectation of the market P/E ration? a. 37.69 b. 24.92 c. 58.15 d. 55.02 e. 47.82
6
mni.3
The time value of money is used in calculating bond prices because: Group of answer choices A - The company might choose to repay the bonds prior to their maturity date B - Bond investors receive future payments and purchase bonds with current dollars C - The amount to be repaid at maturity will change as market rates change D - Cash interest payments to bondholders will change as market rates change
Two depository institutions have composite CAMELS ratings of 1 or 2 and are "well capitalized." Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions have the following financial ratios and CAMELS ratings: Use Table 13–11. Institution A Institution B Tier I leverage ratio (%) 8.80 7.93 Net income before taxes/risk-weighted assets (%) 2.33 1.95 Nonperforming loans and leases/gross assets (%) 0.53 0.68 Other real estate owned/gross assets (%) 0.15 0.45 Brokered deposits/total assets (%) 3.75 1.05 One year asset growth 7.35 4.65 Loans as a Percentage of Total Assets: Construction & Development 0.00 0.00 Commercial & Industrial 18.36 11.40 Leases 2.05 1.75 Other Consumer 18.85 18.55 Loans to Foreign Government 0.30 0.30 Real Estate Loans Residual 0.00 0.00…
alculate the market price of each bond on 23rd April 2021 that issued by AAA Ltd., using the data provided in the table below. What is the current total value of minimum application? Time to Maturity U.S. Treasury Bond Yield1 Yr 0.12%2 Yr 0.14%3 Yr 0.20%4 Yr 0.25%5 Yr 0.27%7 Yr 0.46%10 Yr 0.67% Corporate Bonds Fact SheetIssuer: AAA Company Ltd.Issuing date: 23rd April 2021Bond expiration date: 25th April 2025Face value: $ 1000 per bond.Minimum application: 50 Bonds ($ 50,000)Interest rate: Floating Interest Rate. The Interest Rate isthe sum of the Market Rate plus the Margin.Coupon rate (annual): Central Government Bond Yield + 1.86%p.a.Coupon payment: Annually (coupon payment is paid on 10thJuly every year)Market Yield :4.00%
1 views You have the following initial information on CMR Co. on which to base your calculations and discussion for questions 1) and 2):• Current long-term and target debt-equity ratio = 1:4• Corporate tax rate = 30%• Expected Inflation = 1.75%• Equity beta = 1.6385• Debt beta = 0.2055• Expected market premium (rM – rF) = 6.00%• Risk-free rate (rF) = 2.15% 1) The CEO of CMR Co., for which you are CFO, has requested that you evaluate a potential investment in a new project. The proposed project requires an initial outlay of $7.15 billion. Once completed (1 year from initial outlay) it will provide a real net cash flow of $575 million in perpetuity following its completion. It has the same business risk as CMR Co.’s existing activities and will be funded using the firm’s current target D:E ratio. a) What is the nominal weighted-average cost of capital (WACC) for this project?b) As CFO, do you recommend investment in this project? Justify your answer (numerically). 2) Assume now a…

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