Question
In: Finance
A. Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are...
A.
|
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 33 percent, what is the aftertax cost of Ying's debt? |
|
Bond |
Coupon Rate |
Price Quote |
Maturity |
Face Value |
| 1 | 5.9% | 110 | 8 years | $ 23,000,000 |
| 2 | 7.4 | 118 | 11 years | 36,000,000 |
| 3 | 6.5 | 112 | 26 years | 49,000,000 |
| 4 | 7.5 | 123 | 40 years | 62,000,000 |
B.
Lannister Manufacturing has a target debt-equity ratio of 0.58.
Its cost of equity is 17 percent, and its cost of debt is 9
percent. If the tax rate is 32 percent, what is the company's
WACC?
C.
Fama's Llamas has a weighted average cost of capital of 13
percent. The company's cost of equity is 17 percent, and its pretax
cost of debt is 7.5 percent. The tax rate is 31 percent. What is
the company's target debt-equity ratio?
Solutions
jeff jeffy answered 9 months agoRelated Solutions
A. Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are...
A.
Ying Import has several bond issues outstanding, each making
semiannual interest payments. The bonds are listed in the following
table.
Bond
Coupon Rate
Price Quote
Maturity
Face Value
1
6.5
%
106.46
5
years
$
45,000,000
2
8.0
115.02
8
years
40,000,000
3
7.7
113.57
15.5
years
60,000,000
4
7.3
102.81
25
years
67,000,000
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...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
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
8.70%
105.2
7 years
$22,000,000
2
7.00
95.2
10 years
42,000,000
3
8.40
104.0
17.5 years
47,000,000
4
8.90
105.9
27 years
62,000,000
If the corporate tax rate is 22 percent, what is the aftertax
cost of the company’s debt? (Do not round intermediate
calculations and enter your answer as...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
Ying Import has several bond issues outstanding, each making
semiannual interest payments. The bonds are listed in the following
table. If the corporate tax rate is 32 percent, what is the
aftertax cost of Ying's debt? (Do not round your intermediate
calculations.)
Bond
Coupon Rate
Price Quote
Maturity
Face Value
1
6.3%
102
5 years
$ 17,000,000
2
7
110
8 years
43,000,000
3
5.5
105
20 years
41,000,000...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
Ying Import has several bond issues outstanding, each making
semiannual interest payments. The bonds are listed in the following
table. If the corporate tax rate is 35 percent, what is the
aftertax cost of Ying's debt? (Do not round your
intermediate calculations.)
Bond
Coupon Rate
Price Quote
Maturity
Face Value
1
5.8%
105
5 years
$ 19,000,000
2
6.4
115
9 years
45,000,000
3
5.8
108
19 years
...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
Ying Import has several bond issues outstanding, each making
semiannual interest payments. The bonds are listed in the following
table.
Bond
Coupon Rate
Price Quote
Maturity
Face Value
1
6.4
%
106.26
5
years
$
44,000,000
2
7.9
114.92
8
years
39,000,000
3
7.6
113.47
15.5
years
59,000,000
4
7.2
102.71
25
years
54,000,000
If the corporate tax rate is 35 percent, what is the aftertax
cost of the company’s debt? (Do not round intermediate
calculations. Enter your answer as...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
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 8.90 %
105.4 3 years $ 24,000,000 2 6.60 95.0 6 years 44,000,000 3 8.60
104.2 13.5 years 49,000,000 4 9.10 106.1 23 years 64,000,000 If the
corporate tax rate is 35 percent, what is the aftertax cost of the
company’s debt? (Do not round intermediate calculations and enter
your answer...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
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
8.60%
106.1
6 years
$20,000,000
2
6.60
94.3
9 years
38,000,000
3
8.30
104.9
16.5 years
43,000,000
4
8.80
94.7
26 years
58,000,000
If the corporate tax rate is 21 percent, what is the aftertax
cost of the company’s debt? (Do not round intermediate
calculations and enter your answer as...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
Ying Import has several bond issues outstanding, each making
semiannual interest payments. The bonds are listed in the following
table.
Bond
Coupon Rate
Price Quote
Maturity
Face Value
1
5.00
%
103.18
5
years
$
45,000,000
2
7.10
112.80
8
years
40,000,000
3
6.30
107.45
15
1/2 years
50,000,000
4
5.90
102.75
25
years
65,000,000
If the corporate tax rate is 22 percent, what is the aftertax
cost of the company's debt? (Do not round intermediate
calculations and enter your...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
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
8.70%
105.7
7 years
$27,000,000
2
6.90
94.7
10 years
47,000,000
3
8.40
104.5
17.5 years
52,000,000
4
8.90
106.4
27 years
67,000,000
If the corporate tax rate is 22 percent, what is the aftertax
cost of the company’s debt? (Do not round intermediate
calculations and enter your answer as...
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...
Ying Import has several bond issues outstanding, each making
semiannual interest payments. The bonds are listed in the following
table.
Bond
Coupon Rate
Price Quote
Maturity
Face Value
1
6.1%
105.96
5 years
$41,000,000
2
7.6
114.62
8 years
36,000,000
3
7.3
113.17
15.5 years
56,000,000
4
6.9
102.41
25 years
51,000,000
If the corporate tax rate is 35 percent, what is the aftertax
cost of the company’s debt? (Do not round intermediate
calculations. Enter your answer as a percent...
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