FINANCIAL MANAGEMENT; 1) Your firm has just issued a 15-year $1,000.00 par value, 10% annual coupon bond for a net price of $964.00 a) The semi-annual YTM is b) Annual YTM is %. c) What is the yield to maturity? %
FINANCIAL MANAGEMENT; 1) Your firm has just issued a 15-year $1,000.00 par value, 10% annual coupon bond for a net price of $964.00 a) The semi-annual YTM is b) Annual YTM is %. c) What is the yield to maturity? %
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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Transcribed Image Text:FINANCIAL MANAGEMENT;
1) Your firm has just issued a 15-year $1,000.00 par value, 10% annual coupon bond for a net
price of $964.00
a) The semi-annual YTM is
b) Annual YTM is
%.
c) What is the yield to maturity?
2. Your firm has just issued a 10-year $1,000.00 par value, 6% coupon quarterly bond for a net
price of $950.00. What is the annual yield to maturity?
%
3. Your firm has just issued a 10-year $1,000.00 par value, 6% coupon semiannual bond for a
net price of $964.00. The firm's tax rate is 28%.
a) Annual YTM ~ cost of debt is
b) The after-tax cost of debt is
4. Your firm wishes to issue a 20-year bond, an annual coupon of 6%, and the price has been
determined to be RM880. The floatation cost of the issuance is 2% of the selling price. The tax
rate is 24%.
a) The net selling price is RM_
b) Annual YTM is
c) After tax cost of debt is
%
%.
%.
%.
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