Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $1,905 and matures in15 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt?Multiple Choice3.89%3.51%5.54%3.27%4.46%

After-tax cost of debt refers to the cost that is being incurred over the borrowed amount by the…

Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $1,905 and matures 15 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt? Multiple Choice О 3.89% О 3.51% о 5.54%

Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $1,905 and matures 15 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt? Multiple Choice О 3.89% О 3.51% о 5.54%

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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K The outstanding debt of Berstin Corp. has eight years to maturity, a current yield of 9%, and a price of $80. What is the pretax cost of debt if the tax rate is 30%. A. 7.5% B. 10.8 % OC. 6.5 % OD. more information needed
Eastern Bank Limited (EBL) has issued a12% Semi-annual Corporate Bond of Tk. 1000 for 8 years. The YTM is 10%. Required: i. Market Price of Bond. ii. One year from now, investors has realized the bond when YTM has decreased to 8% and the reinvestment rate is 10%. What would be the realized compound yield?
The yield to maturity is 10%. The.corporate tax rate is 31%. What would be the approximate after-tax cost of debt for a new issue of bonds? O 5.28% O 248% O 6.90% O 3.14%
Mojo Mining has a bond outstanding that sells for $2,174 and matures in 18 years. The bond pays semiannual coupons and has a coupon rate of 7.14 percent. The par value is $2,000. If the company's tax rate is 21 percent, what is the aftertax cost of debt? Multiple Choice O O 6.07% 4.75% 534% 65th
13
Chamberlain Company wants to issue new 16-year bonds for some much-needed expansion projects. The company currently has 8.0 percent coupon bonds on the market that sell for $718.32, make semiannual payments, and mature in 16 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Assume a par value of $1,000. Multiple Choice 12.00% 12.30% 6.00% 11.70%
Qq.61. Subject :- Finance
Meacham Enterprises semi-annual bonds currently sell for $1.280 and have a par value of $1,000. They pay a 567.5 coupon every 6 months and have a 15-year maturity, but they can be called in 5 years at $1,150. What is their yield.o.call(XTC Edit Format Table 12pt Paragraph B I UA 16 5 M M
Rappaport Industries has 7,000 perpetual bonds outstanding with a face value of $2,000 each. The bonds have a coupon rate of 6.9 percent and a yield to maturity of 7.2 percent. The tax rate is 35 percent. What is the present value of the interest tax shield? Multiple Choice $352,800 O $966.000 O $338,300 O $4,410.000 Examon
After-Tax Cost of Debt LL Incorporated's currently outstanding 10% coupon bonds have a yield to maturity of 7.8%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is LL's after-tax cost of debt? Round your answer to two decimal places. %
Calculate the cost of capital for a bond that has a $1,000 par value and a contract or coupon interest rate of 11%. Interest payments are $55 and paid semi-annually. The bond has a current market value of $1,000 and will mature in 20 years. The firm's marginal tax rate is 30% a. 11% b. 10.7% c. 7.7% d. 30%
ACB Products has a bond issue outstanding with 8 years remaining to maturity, a coupon rate of 10 percent with interest paid annually, and a par value of $1,000. If the current market price of the bond issue is $814.45, what is the yield to maturity, rd. Question 6 Select one: a. 14% b. 16% c. 12% d. 15% e. 13%If you think you can sell an asset for $15,000 in eight (8) years and you think the appropriate discount rate is 5%, how much would you be willing to pay for the asset today? Question 7 Select one: a. $15,000 b. $10,153 c. $11,236 d. $15,771.00 e. None of the above

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