Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below.Coupon RateMaturityFace Value$8.50%Bond12346.708.208.70Aftertax cost of debtPrice Quote105.594.9104.3106.2%5 years8 years15.5 years25 yearsIf the corporate tax rate is 25 percent, what is the aftertax cost of the company's debt?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.25,000,00045,000,00050,000,00065,000,000

After tax cost of debt = Before tax cost of debt * (1-tax rate)Before tax cost of debt = YTM of the…

Answered: Ying Import has several bond issues…

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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The Chicago Steel Works, Inc., issues $250 million of 10 year step-up bonds to help it finance a plant renovation in Rockford, IL outside Chicago. The issued bonds have the following characteristics: Par = $1000 Current YTM: 4.28% Maturity = 10 years Assigned interest rates (step-ups): Years 1-5: 4.20% Years 6-10: 5.00% If this bond pays semi-annual coupon payments, what is this bond’s current price (NPV)? Show clearly all work, carrying all calculations out to four (4) decimal places. Highlight in bold your answer.
The Chicago Steel Works, Inc., issues $250 million of 10 year step-up bonds to help it finance a plant renovation in Rockford, IL outside Chicago. The issued bonds have the following characteristics: Par = $1000 Current YTM: 4.28% Maturity = 10 years Assigned interest rates (step-ups): Years 1-5: 4.20% Years 6-10: 5.00% If this bond pays semi-annual coupon payments, what is this bond’s current price (NPV)?
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Coupon Bond Rate Price Quote Maturity Face Value $ 1 5.7% 105.46 5 years 53,000,000 234 7.3 114.22 8 years 48,000,000 7.2 112.77 15.5 years 68,000,000 6.5 102.01 25 years 75,000,000 If the corporate tax rate is 23 percent, what is the aftertax cost of the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of debt %
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Coupon Bond Rate Price Quote Maturity Face Value $ 1 6.4% 106.36 6 years 44,000,000 234 7.9 114.92 9 years 39,000,000 7.6 113.47 16.5 years 59,000,000 7.2 102.71 26 years 66,000,000 If the corporate tax rate is 24 percent, what is the aftertax cost of the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of debt %
Review the Bond Table below; all bonds have semi-annual payments. Security. Coupon Rate Face Value 0.00% $1,000 4.50% 5.00% 1-yr Treasury 5-yr Treasury 10-yr Treasury 5-yr Corporate (rated A) 10-year Corporate 8.40% (rated BBB) Multiple Choice O 4.80% O If a company wanted to issue a new Corporate Bond (10 years, A rating) for full price, what coupon rate would it have to offer? 6.90% 6.50% 7.75% 7.50% $1,000 $1,000 $1,000 None of the above $1,000 Price $ 965.90 $991.18 $976.94 $912.46 $1,044.66
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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table bel If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Aftertax cost of debt
Melekom Berhad has 16 years to maturity bond with a RM1,000.00 par value.The bond pays RM7S.00 a year in interest and is selling for RMSSO.OO. Thecompany's tax rate is 25%.Calculate the approximate yield to maturity and the after tax cost of debt.
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Dengar
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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 2 3 4 Coupon Rate Price Quote 5.1% 6.7 Cost of debt 6.6 5.9 104.86 113.62 112.17 101.41 Maturity 5 years 8 years 15.5 years 25 years % Face Value $ If the corporate tax rate is 24 percent, what is the aftertax cost of the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 59,000,000 54,000,000 74,000,000 81,000,000

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