5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,200 face value and...

5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,200 face value and a 8% coupon, semiannual payment ($48 payment every 6 months). The bonds currently sell for $845.87. If the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? Round your answer to 2 decimal places. Do not round intermediate calculations.

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jeff jeffy answered 2 years ago

Suppose a US company issued 10-year bonds 5 years ago with a face value of $1,000...

Suppose a US company issued 10-year bonds 5 years ago with a face value of $1,000 and an annual coupon rate of 6%. The coupons are paid semi-annually and the bonds are currently trading in the market at a price of $1,089.83. The company is considering whether to call the bonds and issue new 5- year bonds at a par value of $1,000. Based on this information, answer the following four questions. (i) What is the yield to maturity on...

A city-issued 25-year general obligation (G.O.) $5,000 face value bonds ten years ago, with a coupon...

A city-issued 25-year general obligation (G.O.) $5,000 face value bonds ten years ago, with a coupon rate of 8 percent, payable semiannually. The current market rate of interest on similar bonds is 10 percent. Answer the following questions. (a) What was the market price of the bonds on the day they were issued? (b) What is the market price of the bond today? (c) What will be the bonds’ current yield (C.Y.) and capital gain yield (C.G.Y.) in the eleventh...

15. Marvin’s Interiors issued 9-year bonds 2 years ago. The bonds have a face value of...

15. Marvin’s Interiors issued 9-year bonds 2 years ago. The bonds have a face value of $1,400, a 9.0 percent, semiannual coupon, and a current market price of $1,189. What is the pre-tax cost of debt? 13.97 percent 13.02 percent 12.27 percent 13.53 percent 16. Jack's Construction Co. has 100,000 bonds outstanding that are selling at par value. The bonds yield 8.6 percent. The company also has 3.1 million shares of common stock outstanding. The stock has a beta of...

Bonds Renco issued 8 percent, semiannual bonds with a face value of $30,000 and two year...

Bonds Renco issued 8 percent, semiannual bonds with a face value of $30,000 and two year maturity on January 1, 2012. The market rate of interest on the date of the issue was 6 percent. Renco retired the bonds at the end of 2012 for $30,200/ Renco uses the effective interest method for recording bond interest expense. 1. Calculate the issue price of the bonds. 2. Prepare an amortiztion schedule for the binds. 3. Prepare the journal entries to record...

sixteen years ago, national distributors issued 30-year bonds that have a face value of $1000 and...

sixteen years ago, national distributors issued 30-year bonds that have a face value of $1000 and a coupon rate of 8.55%. the bond pays coupons semiannually. the required return in the market is 7.48%. 1. What is the price today? 2. What is the formula you used 3. what is the value for the number of periods (t) used in the equation? 4. What is the value for interest rate used in the equation?

________ 16. Seven years ago, Peterborough Trucking issued 15-year bonds with a face value of $1,000...

________ 16. Seven years ago, Peterborough Trucking issued 15-year bonds with a face value of $1,000 each. Today, the market rate of return on these bonds is 7.9 percent and the market price is $984.20 The bonds pay interest semi-annually. What is the coupon rate? a. 6.67 percent b. 6.85 percent c. 7.63 percent d. 7.76 percent ________ 18. Today, you paid a total of $1,108.16 to purchase a $1,000 bond. The bond has a 6...

Several years ago, Castles in the sand Inc. issued bonds at face value of 1,000 at...

Several years ago, Castles in the sand Inc. issued bonds at face value of 1,000 at a yield to maturity of 8.6%. Now, with 7 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 15%. What is the price of the bond now? (Assume semi-annual coupon payments) Suppose that investors believe that Castles can make good on the promise coupon payments but that...

1) Exactly five years ago, WSGD Holdings issued 20-year bonds with a $1,000 face value. These...

1) Exactly five years ago, WSGD Holdings issued 20-year bonds with a $1,000 face value. These bonds pay $55 in coupon payment every six months. The bonds currently sell for $950. Due to additional financing needs, the firm has decided to issue new bonds that will have a maturity of 20 years, a par value of $1,000, and pay 4% coupon every six months. If both bonds have the same yield, how many new bonds must WSGD Holdings issue to...

Several years ago, Timmons Company issued bonds with a face value of $1,000,000. It redeemed half...

Several years ago, Timmons Company issued bonds with a face value of $1,000,000. It redeemed half of the bonds at 99 on January 1, 2020. At that time, the total unamortized premium on the bond issue was $30,000. a) What is the reacquisition price of the bonds redeemed? b) What is the carrying value of the bonds redeemed? c) What is the gain or loss on redemption? d) Prepare the entry to record the redemption of the bonds. e) What...

7 years ago Sunland Corporation issued 20-year bonds that had a $1,000 face value, paid interest...

7 years ago Sunland Corporation issued 20-year bonds that had a $1,000 face value, paid interest annually, and had a coupon rate of 7 percent. If the market rate of interest is 5.5 percent today, what is the current market price of an Sunland Corporation bond? Current market price _____

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