Swifty Co. is building a new hockey arena at a cost of $2,600,000. It received a downpayment of $460,000 from local businesses tosupport the project, and now needs to borrow $2,140,000 to complete the project. It therefore decides to issue$2,140,000 of 12.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. Thebonds yield 11%.Click here to view factor table.(a)Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5decimal places, e.g. 1.25124 and the final answer to 0 decimal places, e.g. 58,971. If no entry is required, select "No Entry" for the accounttitles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.List all debit entries before credit entries.)DateJanuary 1,2024Account Titles and ExplanationCashBonds PayablePremium on Bonds PayableDebitCreditIII

Bonds serve as an important source of financing for organizations and provide investors with a…

wifty Co. is building a new hockey arena at a cost of upport the project, and now needs to borrow $2,140 2,140,000 of 12.0%, 10-year bonds. These bonds we monds yield 11%. Click here to view factor table.

wifty Co. is building a new hockey arena at a cost of upport the project, and now needs to borrow $2,140 2,140,000 of 12.0%, 10-year bonds. These bonds we monds yield 11%. Click here to view factor table.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The second image is the data table in the question, thank you
Landman Corporation (LC) manufactures time series photographic equipment. It is currently at its target debt-equity ratio of .78. It’s considering building a new $66.8 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $7.93 million in perpetuity. There are three financing options: A new issue of common stock: The required return on the company’s new equity is 15.2 percent. A new issue of 20-year bonds: If the company issues these new bonds at an annual coupon rate of 7.1 percent, they will sell at par. Increased use of accounts payable financing: Because this financing is part of the company’s ongoing daily business, the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of .10. (Assume there is no difference between the pretax and aftertax accounts payable cost.) If the tax rate is 23 percent, what is the NPV of the new plant? Note: A negative answer should…
WACC. Grey's Pharmaceuticals has a new project that will require funding of $7.3 million. The company has decided to pursue an all-debt scenario. Grey's has made agreements with four lenders for the needed financing. These lenders will advance the following amounts at the interest rates shown: Click on the Icon D in order to copy its content into a spreadsheet. Lender Amount Interest Rate Steven $2,555,146 12% Yang $2,095,642 11% Shepherd $1,778,883 8% Bailey $870,329 9% What is the weighted average cost of capital for the $7,300,000? % (Round to two decimal places.)
Penny Arcades, Inc., is trying to decide between the following two alternatives to finance its new $30 million gaming center: a. Issue $34 million of 6% bonds at face amount.b. Issue 1 million shares of common stock for $34 per share. 1. Assuming bonds or shares of stock are issued at the beginning of the year, complete the income statement for each alternative. (Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000). Round your "Earnings per Share" to 2 decimal places. Round your "Earnings per Share" to 2 decimal places.) Issue Bonds Issue stock Operating income 10,900,000 10,900,000 Interest expense (bonds only) Income before tax Income tax expense (40%) Net Income Number of shares 3,900,000 4,900,000 Earnings per share
ABC Inc. has a the capital structure shown below. Liabilities Stockholders' Equity $122,099,000 $95,228,000 ABC Inc. will raise additional capital for new projects this year, in the amount of $44,978,000. The firm believes, however, that a capital structure with 56.25% debt is ideal. The firm will be able to issue new discount bonds at a price of $909 with a yield-to-maturity of 3%. Assuming they want to change their capital structure to the new target, how many new bonds will the firm need to issue? unur answer to the nearest bond.
Mary, Inc. is considering a project for next year, which will cost $5 million. Mary plans to use the following combination of debt and equity to finance the investment. Issue $1.5 million of 10-year bonds at a price of 101, with a coupon/contract rate of 4%, and flotation costs of 2% of par. Use $3.5 million of funds generated from retained earnings. The equity market is expected to earn 8%. U.S. Treasury bonds are currently yielding 3%. The beta coefficient for Mary, Inc. is estimated to be .70. Mary is subject to an effective corporate income tax rate of 30 percent. Compute Mary's expected rate of return using the Capital Asset Pricing Model (CAPM). Please show calculations.
1.I want to have $2,000,000 saved by retirement. How much do I need to save each year for 40 years if the rate-of-return is 8%? 2.Company X is issuing bonds. They plan to issue 10,000, $1000 par, 6% bonds that pay semi-annual for 5 years. What are the proceeds from this bond sale if the market rate is 7%? 3.If I think I need $100,000 a year in retirement for 30 years, how much do I need at retirement if the rate-of-return is 8%? 4.Company X is issuing bonds. They plan to issue 10,000, $1000 par, 6% bonds that pay semi-annual for 5 years. If the bond price is $1020, what is the market annual rate-of-return? (percentage, 2 decimals, e.g. xx.xx)
Click here to view the factor table. https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf