FINANCIAL ACCOUNTING: TOOLS LL W/ ACCES
FINANCIAL ACCOUNTING: TOOLS LL W/ ACCES
9th Edition
ISBN: 9781119493648
Author: Kimmel
Publisher: WILEY
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Chapter 10, Problem 10.9EYCT
To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To Write: A memorandum to the president of Incorporation N.

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Suppose PayPal (PYPL) has no debt and an equity cost of capital of 9.7 %. The average debt-to- value ratio for the credit services industry is 15.4 %. What would its cost of equity be if it took on the average amount of debt for its industry at the cost of debt of 6%?

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FINANCIAL ACCOUNTING: TOOLS LL W/ ACCES

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