Question
In: Finance
Calculate cost of debt for the following: The bond with a face value of 1000 were...
Calculate cost of debt for the following: The bond with a face value of 1000 were trading at RM 940 with 5 years to maturity ( annual coupon payment of 5%). Buying the truck means that he would incurring a cost of RM 85,000 each year for the whole feet. The company tax rate is 30%. The cost of capital is same as cost of deb. Which one is wiser equity or debt?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Calculate the value of a bond with face value of 1000 usd paying interest of 8%...
Calculate the value of a bond with face value of 1000 usd paying
interest of 8% over 5 tears and a yield of 7%
What is the present value of the following bond offering. Face value of $1000, maturity in...
What is the present value of the following bond offering. Face
value of $1000, maturity in 10 years, the coupon rate is 8%, the
yield to maturity is also 8%, coupon is paid
semi-annually.
a.
$1,050
b.
$950
c.
825
d.
1,231
e.
1,000
Calculate the price if a 5% coupon, $1000 face value 5-year bond if the appropriate annual...
Calculate the price if a 5% coupon, $1000 face value 5-year
bond if the appropriate annual discount rates are 3% for the first
2 years and 8% for the final three years. Calculate this bond’s
yield to maturity or average annual yield. Calculate your return if
you hold this bond for one year. If we assume the change in annual
rates is due to expectations of inflation, what does the bond
market thing inflation is going to do in the...
You own a bond with the following features: Face value of $1000, Coupon rate...
You own a bond with the following features:
Face value of $1000,
Coupon rate of 5% (annual)
13 years to maturity.
The bond is callable after 7 years with the call price of
$1,071.
If the market interest rate is 3.51% in 7 years when the bond
can be called, if the firm calls the bond, how much will it save or
lose by calling the bond?
State your answer to the nearest penny (e.g., 84.25)
If...
18- You own a bond with the following features: Face value of $1000, Coupon...
18-
You own a bond with the following features:
Face value of $1000,
Coupon rate of 3% (annual)
9 years to maturity.
The bond is callable after 4 years with the call price of
$1,069.
If the market interest rate is 4.68% in 4 years when the bond
can be called, if the firm calls the bond, how much will it save or
lose by calling the bond?
State your answer to the nearest penny (e.g., 84.25)...
6- You own a bond with the following features: Face value of $1000, Coupon...
6- You own a bond with the following features:
Face value of $1000,
Coupon rate of 5% (annual)
8 years to maturity.
The bond is callable after 4 years with the call price of
$1,073.
If the market interest rate is 3.59% in 4 years when the bond
can be called, if the firm calls the bond, how much will it save or
lose by calling the bond?
State your answer to the nearest penny (e.g., 84.25)...
You own a bond with the following features: Face value of $1000, Coupon rate...
You own a bond with the following features:
Face value of $1000,
Coupon rate of 4% (annual)
11 years to maturity.
The bond is callable after 7 years with the call price of
$1,069.
If the market interest rate is 4.23% in 7 years when the bond
can be called, if the firm calls the bond, how much will it save or
lose by calling the bond?
State your answer to the nearest penny (e.g., 84.25)
If...
(Cost of debt) Carraway Seed Company is issuing a $1000 par value bond that pays 11...
(Cost of debt) Carraway Seed Company is issuing a $1000 par
value bond that pays 11 percent annual interest and matures in 12
years. Investors are willing to pay $945 for the bond. Flotation
costs will be 11 percent of market value. The company is in a 20
percent tax bracket. What will be the firm's after-tax cost of
debt on the bond?
1. Calculate the price of a bond with Face value of bond is $1,000 and: a....
1. Calculate the price of a bond with Face value of bond is
$1,000 and:
a. Bond yield of 8.4%, coupon rate of 7% and time to maturity is
5 years. Coupon is paid semi-annually (Bond 1)
b. Bond yield of 7%, coupon rate of 8% and time to maturity is 4
years. Coupon is paid semi-annually
c. Calculate the price of Bond 1 right after the 5th coupon
payment.
2. Arcarde Ltd issues both ordinary shares and preference shares...
You own a bond with the following features: Face value of $1000, Coupon rate of 6%...
You own a bond with the following features: Face value of $1000,
Coupon rate of 6% (annual) 12 years to maturity. The bond is
callable after 6 years with the call price of $1,070. If the market
interest rate is 4.32% in 6 years when the bond can be called, if
the firm calls the bond, how much will it save or lose by calling
the bond? State your answer to the nearest penny (e.g., 84.25) If
there would be...
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