Question 42 ptsFiler Manufacturing has 7,194,812 shares of common stock outstanding. The currentshare price is $56.81, and the book value per share is $3.13. Filer Manufacturing alsohas two bond issues outstanding. The first bond issue has a face value of $61,950,970,has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issuehas a face value of $72,338,506, has a 0.06 coupon, matures in 20 years, and sells for92 percent of par.The most recent dividend was $2.46 and the dividend growth rate is 0.05. Assume thatthe overall cost of debt is the weighted average of that implied by the two outstandingdebt issues. Both bonds make semiannual payments. The tax rate is 0.35.What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)

Coupon Rate is the annual interest rate that a bond issuer promises to pay to the bondholder. It is…

Answered: Question 4 2 pts Filer Manufacturing…

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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A $1,000 3% convertible and callable corporate bond with exactly 10 years to maturity is currently trading to yield -0.3% (negative yield). Currently, the market value of the bond exceeds its conversion value by $70. The issuer announces the bond will be called at a call price of 130 and simultaneously the market value of the issuer's common stock decreases by 1%. Find the market value of the bond following the announcement. Express your answer in dollars and cents (not as a % of par), but omit the $ sign
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Chapter 6 Case (static) Question Help bonds were issued 5 years ago at their $1,000 par value and have exactly 25 years remaining until they mature. They have an 8.0% coupon interest rate, are convertible into 50 shares of common stock, and can be called any time at $1,080.00. The bond is rated Aa by Moody's. Atilier Industries, a manufacturer of sporting goods, recently acquired a small athletic-wear company that was in financial distress. As a result of the acquisition, Moody's and other rating agencies are considering a rating change for Atilier bonds. Recent economic data suggest that expected inflation, currently at 5.0% annually, is likely to increase to a 6.0% annual rate. Annie remains interested in the Atilier bond but is concerned about inflation, a potential rating change, and maturity risk. To get a feel for the potential impact of these factors on the bond value, she decided to apply the valuation techniques she learned in her finance course. To Do a. If the price of the…
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