St. thomas company is planning to issue $1,000 par value bonds. the bonds will have a coupon rate of 9.5 percent and will be sold at a market price of $980. flotation costs will amount to 4 percent of market value. the bonds will mature in 15 years and coupon payments will be semi-annual. st. thomas' marginal tax rate is 35%. what is the firm's cost of debt financing?
a. 6.93%
b. 6.68%
c. 6.34%
d. 10.28%
e. 9.76%

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.

The master manufacturing company has just announced a tender offer for its own common stock. master is offering to buy up to 100% of the company's stock at $20 per share contingent on at least 64% of the outstanding shares being tendered. after the announcement of the offer, the stock closed on the nyse up 2.50 at $18.75. a customer has 100 shares of master stock in his cash account. the customer tells you that he wishes to "cash out" his position. you should recommend that the customer:

Later movers do not face: entrenched competitors. reduced uncertainty over technologies. high growth markets. lower market uncertainty.