Today Melton Corporation's bonds sold for $1087.50.  If the bond's annual coupon payment a is $75.00 , it matures in 20 years and the company has a tax rate of 25%, what is  after tax cost to the firm of the funds raised through the sale of these bonds.

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A: A pure discount bond, also known as a zero-coupon bond, is a debt security that pays no periodic…

Q: What would be Oberon's before-tax component cost of debt? (Round your answer to 2 declmal places.)

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A: YTM formula: YTM=coupon+face value - (price)years to maturityface value -(price)2

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A: The interest rate on the debenture is calculated on the face value.  The company gets a tax benefit…

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A: After tax cost of debt is yield to maturity of bond after tax,  cost of bond based on the coupon and…

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A: Cost of debt is that which includes the cost of issue the debt and cost of maturity the debt also…

Q: HMK Enterprises would like to raise $10.0 million to invest in capital expenditures. The company…

A: Investment amount $10 millionCoupon rate: 6.59%Face value: $1,000YIELD:AAA: 6.19%AA: 6.31%A:…

Q: You are analyzing the after-tax cost of debt for a firm. You know that the firm's 12-year maturity,…

A: Here, Value of Bond is $1,000 Coupon Rate is 9.50% Compounding Period is Semi Annual Selling Price…

Q: XYZ has an outstanding bond. It's a 6% semiannual coupon bond maturing in 4 years with a par value…

A: YTM is the rate of return which the bondholders received at the time of maturity.

Q: Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds…

A: Bonds are debt securities issued by governments and private companies to raise funds from the…

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A: A bond is a kind of debt security issued by the government and private companies to the public for…

Q: corporate bond has a face value of $1,000 and a coupon rate of 8.25%, paid annually. The bond…

A: The annual coupon payment on the bond is calculated below

Q: Lugget Corp. has one bond issue outstanding with an annual coupon of 4.4%, a face value of $1,000…

A: Pre tax cost of debt refers to the Yield to Maturity (YTM) of the bond. This can be calculated by…

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A: When a company needs to acquire funds from outside sources it has to seek either the issuance of…

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A: Bonds are issued by corporations to raise money for future long term projects bonds are very cheap…

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A: Introduction: Yield to maturity is the rate of return an investor earns from all the interest…

Q: Hydro Systems has bonds outstanding with a face value of $1,000, 13 years to maturity, and a coupon…

A: PV of bond= Coupon*(1-(1+r)-n)/r +FV /(1+r)nCoupon=1000*6.5% /2=$32.5n=13*2=26 semi-annual…

Q: Jones Cricket Institute issued a 30 year, 8 percent semiannual bond 3 years ago. The bond currently…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years…

A: The objective of the question is to calculate the after-tax cost of debt for Jakob Company, which…

Q: Bayside Inc. sells $5,000,000 of five-year, 10% bonds at the start of the year.  The bonds pay…

A: Value of Bonds=$5,000,000  Coupon rate=10% Years to maturity=5 years Effective yield=9% Bond…

Q: e-Midland, Inc. is issuing a ​$1,000 par value bond that pays 7.5 percent annual interest and…

A: After tax cost of bond is the yield to maturity of bond that is rate of return realized on the bond…

Q: Twill Consulting has total assets of $1,810. These assets are expected to increase in value to…

A: Value of equity:A company's ownership stake is referred to as the "value of equity" by its…

Q: percent, paid semi-annually. What is the company's pretax cost of debt if the bonds currently sell…

A: Cost of debt is the part of debt that a company pay for the debt. It is the amount paid for the…

Q: You are analyzing the after-tax cost of debt for a firm . You know that the firm's 12 - year…

A: Explanation:1. Understand the Given Data:• Maturity (n) = 12 years• Coupon Rate (C) = 14.50%…

Q: Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds…

A: The after-tax cost of debt is a critical financial metric that reflects the effective interest rate…

Q: A company is issuing a 15-year bond with 12 percent coupon rate, $1,000 par value, $970 selling…

A: Time = n = 15 YearsCoupon Rate = c = 12%Face Value = fv = $1000Current Price of Bond = pv =…

Q: Beckham Corporation has semiannual bonds outstanding with nine years to maturity that are currently…

A: A bond is a type of debt security. Borrowers, such as businesses or governments, issue bonds to…

Q: Calculate the pre-tax cost of debt capital. Pre-tax cost of debt capital %

A: The pre-tax cost of debt shows the interest rate that a business pays on its loan before taxes are…

Q: If the company’s tax rate is 28%, what component cost of debt should be used in the WACC…

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Q: Sabine Co has outstanding bonds with 10 years remaining until maturity, a coupon rate of 7%,…

A: Data given: Coupon rate=7% (semi-annual) N=10 years Par value=$1000 Market price=$1000 * 96.5%=$965…

Q: You know that the after-tax cost of debt capital for Oriole Company is 15.4 percent. If the firm has…

A: The cost of debt capital is the percentage of the expense incurred on the total debt of a business.…

Q: Oberon, Incorporated has a $30 million (face value) 8-year bond issue selling for 97 percent of par…

A: Given Data: Face value of the bond30years to maturity8Annual coupon rate8.3%