Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below.Coupon RateMaturityFace Value$8.90%Bond1236.808.609.20Aftertax cost of debtPrice Quote106.893.4105.896.5%4 years6 years14.5 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., 32.16.28,000,00031,000,00036,000,00055,000,000

Bond1234Coupon rate8.90%6.80%8.60%9.20%Face value$28,000,000$31,000,000$36,000,000$55,000,000Price…

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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Consider the following two banks: Bank 1 has assets composed solely of a 10-year, 11.00 percent coupon, $1.6 million loan with a 11.00 percent yield to maturity. It is financed with a 10-year, 10 percent coupon, $1.6 million CD with a 10 percent yield to maturity. Bank 2 has assets composed solely of a 7-year, 11.00 percent, zero-coupon bond with a current value of $1,133,012.90 and a maturity value of $2,352,316.24. It is financed by a 10-year, 5.25 percent coupon, $1,600,000 face value CD with a yield to maturity of 10 percent. All securities except the zero-coupon bond pay interest annually. a. If interest rates rise by 1 percent (100 basis points), what is the difference in the value of the assets and liabilities of each bank? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter the answers in dollars, not millions of dollars. Round your answers to 2 decimal places. (e.g., 32.16)) Before Interest Rise Asset Value After Interest Rise…
Desert Trading Company has issued $100 million worth of long-term bonds at a fixed rate of 10%. The firm then enters into an interest rate swap where it pays SOFR and receives a fixed 5% on notional principal of $100 million. What is the firm's effective interest rate on its borrowing? Only typing answer Please answer explaining in detail step by step without table and graph thankyou
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 %
Desert Trading Company has issued $100 million worth of long-term bonds at a fixed rate of 10%. The firm then enters into an interest rate swap where it pays SOFR and receives a fixed 5.2% on notional principal of $100 million. What is the firm's effective interest rate on its borrowing? Note: Enter value as positive amount. Round your answer to 1 decimal place. Effective interest rate %
The coupon rate on an issue of debt is 9%. The yield to maturity on this issue is 12%. The corporate tax rate is 33 %. What would be the approximate after-tax cost of debt for a new issue of bonds? Note: Round your answer to 2 decimal places.
A U.S. Treasury bond pays 7.6 percent interest. You are in the 22 percent tax bracket. 5.93 is the after tax-yield on this bond. If you face a 22% marginal tax rate, what is your after-tax return on each of the following bonds? A 8.6% coupon semiannual corporate bond with 7 years to maturity, currently selling for $950. Don't round steps. 2 decimal answer. _% A 5.8% coupon semiannual corporate bond with 6 years to maturity, currently selling for $1,015. Don't round steps, 2 decimal answer. _% A 4.8% coupon semiannual municipal bond with 11 years to maturity, currently selling for $1,016. Don't round steps. 2 decimal answer. _%
Kk.428.
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Bond Coupon Rate Price Quote Maturity Face Value 1 8.50% 106.0 5 years $19,000,000 2 6.50 94.4 8 years 39,000,000 3 8.20 104.8 15.5 years 44,000,000 4 8.70 94.6 25 years 59,000,000 If the corporate tax rate is 25 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.)
A bond issued by the State of Pennsylvania provides a 5.75% yield. What yield on a Synthetic Chemical Company bond would cause the two bonds to provide the same after-tax rate of return to an investor in the 35.00% tax bracket? (Round your final answer to two decimal places.) O a. 3.74% O b. 7.76% O c. 8.85% O d. 4.26% O e. 16.43%
Answer
New Hampshire Corp. has decided to issue three-year bonds denominated in 10 million Chinese yuan at par. The bonds have a coupon rate of 14 percent. If the yuan is expected to appreciate from its current level of $0.15 to $0.156, $0.164, and $0.173 in years 1, 2, and 3, respectively, what is the financing cost of these bonds?
Please keep at least 2 decimal points for dollar amounts and at least 4 significant digits for rates. Question 1 Knick Inc. has two bonds outstanding, and both pay semi-annual coupons. The first bond has 18 years to maturity, 16% coupon rate, and $720,000 face value. It is trading at 110 (110% of face value). The second bond has 10 years to maturity, 8% coupon rate, and $880,000 face value. It is trading at 13.5% YTM. Knick has 150,000 shares outstanding with beta of 1.25. The expected dividend per share is $4 next year and will grow at 2% per year. The market return is 15% and the risk-free rate is 3%. Corporate tax is 25%. a) Calculate the cost of equity and the equity value. b) Calculate the after-tax cost of debt. c) Calculate the WACC. d) Estimate the unlevered beta. e) Assume that Knick changes its debt-to-equity ratio to 0.2 and its cost of debt decreases 40 bps, estimate its new cost of equity and WACC.

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