Question
In: Finance
Sincere Stationery Corporation needs to raise $480,000 to improve its manufacturing plant. It has decided to...
Sincere Stationery Corporation needs to raise $480,000 to improve its manufacturing plant. It has decided to issue a $1,000 par value bond with an annual coupon rate of 11.5 percent with interest paid semiannually and a 15-year maturity. Investors require a rate of return of 8.5 percent.
a. Compute the market value of the bonds.
b. How many bonds will the firm have to issue to receive the needed funds?
c. What is the firm's after-tax cost of debt if the firm's tax rate is 34 percent?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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return of 9 percent.
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1111
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What will these bonds sell for at issuance? (Do not
round intermediate calculations and round your answer to 2 decimal
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b.
Using the IRS
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Edison Corporation needs to raise funds to finance a plant
expansion and has decided to issue 25-year zero coupon bonds to
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percent. Assume a par value of $1,000 and semiannual
compounding.
a.
What will these bonds sell for at issuance? (Do not
round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
b.
Using the IRS amortization rule, what interest deduction can the
company take...
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Assume that a corporation needs to enter the private debt market
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and total-liabilities-to-assets ratio. Considering the accounts
that comprise these ratios, provide examples of accounting
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A manufacturing corporation has installed a plant and machinery in its factory as on 5th January,...
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8% of trade discount was included and 5% of rebates were included
after deducting the trade discount. Initial delivery cost was OMR
12,500 in that 20% of which was handling cost of the whole
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Calculate the theoretical ex-rights price and the value of a
right.
a.
$18.25, $2.85
b.
$13.33, $3.33
c.
$15.00, $5.00
d.
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e.
$12.5, $2.5
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