Use the following data for the next 5 questions:DebtCommonStockPreferredStockMarket63,000 bonds with a 5.0% coupon rate,payable annually, 15 years to maturity,selling at $1,050 per bond.567,000 shares of common stockoutstanding. The stock sells for a priceof $87 per share and has a beta of 1.98.250,000 preferred shares outstanding,currently trading at $63.11 per share;with an annual dividend payment of$8.54,The market risk premium is 16% and therisk free rate is 6%Tax Rate21%What is the before tax cost of debt (Ra)? (Answer as a percentage and round to 2 decimals)O a. 2.50 %O b. 6.91 %O c. 7.50%O d. 4.53 %e. 1.96 %#3$4%6547&hp78

Given information: Par or face value (FV) = $1,000 Bond Price (PV) = $1,050 Coupon rate (CR) = 5% or…

Answered: Use the following data for the next 5…

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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Sebastian Corporation issued 30-year $50 million of face value bonds that have a coupon rate of 6% paid annually. The bonds were issued at 102. Given this information, calculate the yield to maturity. Multiple Choice 5.65% 5.85% 5.55% 5.75% 5.95% Show me all the calculation steps and formulas if necessary
Stock HGH has paid the following annual dividends (per share): $1.00 two years ago, $1.50 last year, and $2.00 in the current year. If the stock price is currently $12, what is its current dividend yield? Question 9 options: 8.3% 37.5% 16.7% 12.5%
Raghubhai
Consider the following book value balance sheet of ABC, in which all figures are in million dollars. The preferred stock currently sells for $15 per share and the common stock for $20 per share. There are 1 million common shares outstanding. Assets Liabilities and Net Worth Cash and short-term securities $1 Bonds with coupon rate of 8% paid annualy, maturity of 10 years and the current yield to maturity of 9% $10 Account receivables $3 Preferred stock (par value $10 per share) $2 Inventories $7 Common stock $10 Plant and equipment $21 Retained earnings $10 Total $32 $32 a) What is the capital structure of the firm based on market values? b) The preferred stock pays a dividend of $2 per share, the beta of the common stock is 1.5, the market risk premium is 7%, the risk-free rate is 4%, and the firm’s tax rate is 40%. ABC’s bonds have coupon rate of 6%, and currently are trading at par. What is the firm’s weighted average cost of capital (WACC)?…
A corporate bond sells for $990 currently. It has a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their capital gains yield? 8.11% 0.14% 9.47% 0.13%
Questions are in photo. please show workings
Graphical Designs is offering 15-15 preferred stock. The stock will pay an annual dividend of $15 with the first dividend payment occurring 15 years from today. The required return on this stock is 4 45 percent What is the price of the stock today? Mutiple Choice O O O $10324 $33708
5. A securities firm has provided the balance sheet below. Assets ($ millions) $ 34 Liabilities and Equity ($ millions) Short-term funding Cash $ 27 Debt securities 175 Bonds 300 Equity securities 400 Debentures 197 Other assets 12 Equity 97 Total Assets $ 621 Total Liabilities and Equity $ 621 The debt securities have an annual 7.25% coupon rate, 22 years to maturity and a yield to maturity of 6.75%. The market value of the equity securities and the other assets is equal to their book value. The firm has 500,000 shares outstanding and the price per share is $35.67. a. Calculate the firm's aggregate indebtedness to net capital ratio. b. Calculate the firm's highly liquid assets to total liabilities ratio. Based on the firm's ratios from a and b, is it in compliance with Rule 15C 3-1? Why or why not? C.
*assume all bonds make semiannual coupon payment*
Assume that Almond Milk Company has a $1,000 face value bond with a stated coupon rate of 8.18 percent that is convertible into its common stock at $35.77. The bond is selling at $1,096.27 in the market. The common stock is selling for $33.84 and pays a dividend of 0.62 per share. Calculate the payback premium period.
A $1,000 face value, 6.4% coupon bond pays interest semi-annually and matures in ten years. It has a yield-to-maturity of 7.1325%. The bond's price is closest to $920 $1,203 $1,061 $948 2. Pilgrim Corp. stock currently sells for $25 per share? The annual dividend payment is $1.00 per share and earnings per share are $3.00. What is the dividend payout ratio?

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