Business, 29.11.2019 00:31 Justus4215

Cost of debt using both methods (ytm and the approximation formula) currently, warren industries can sell 20 dash year, $1 comma 000-par-value bonds paying annual interest at a 11% coupon rate. because current market rates for similar bonds are just under 11%, warren can sell its bonds for $1 comma 080 each; warren will incur flotation costs of $30 per bond. the firm is in the 25% tax bracket. a. find the net proceeds from the sale of the bond, upper n subscript d. b. calculate the bond's yield to maturity (ytm) to estimate the before-tax and after-tax costs of debt. c. use the approximation formula to estimate the before-tax and after-tax costs of debt.

Answers: 3

Show answers

Other questions on the subject: Business

Business, 22.06.2019 10:10, cuthbertson157

conquest, inc. produces a special kind of light-weight, recreational vehicle that has a unique design. it allows the company to follow a cost-plus pricing strategy. it has $9,000,000 of average assets, and the desired profit is a 10% return on assets. assume all products produced are sold. additional data are as follows: sales volume 1000 units per year; variable costs $1000 per unit; fixed costs $4,000,000 per year; using the cost-plus pricing approach, what should be the sales price per unit?

Answers: 2

continue

Business, 22.06.2019 16:00, anonymous1813

Winners of the georgia lotto drawing are given the choice of receiving the winning amount divided equally over 2121 years or as a lump-sum cash option amount. the cash option amount is determined by discounting the annual winning payment at 88% over 2121 years. this week the lottery is worth $1616 million to a single winner. what would the cash option payout be?

Answers: 3

continue

Business, 23.06.2019 02:00, gthif5424

Which of the following describes a situation of scarcity? a. someone offers free advice about getting into college. b. someone distributes free bottles of water at the beach. c. a child charges friends for a ride on his new bike. d. a person lets the kids in the neighborhood use his pool.

Answers: 1

continue

Business, 23.06.2019 04:40, blakemccain1928

What are the advantages and disadvantages for an individual who accepts a job as a human resource manager in a firm that is in the midst of a retrenchment corporate strategy? a reactor business strategy?

Answers: 3

continue

You know the right answer?

Cost of debt using both methods (ytm and the approximation formula) currently, warren industries can...