Km for the followingIndividual or component costs of capital) Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help in this compute the cost of capital for thea. A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 11.4 percent mat is paud semiannually. The bond is currently selling for a price of $1,121 and will mature in 10 yearsThe firm's tax rate is 34 percentb. If the firm's bonds are not frequently traded, how would you go about determining a cost of debt for this company?A new common stock issue that paid a $174 dividend last year. The par value of the stock is $15, and the firm's dividends per share have grown at a rate of 81 percent per year. This growth rate is expectedto continue into the foreseeable tuture The pnce of this stock is now $27 12d. A preferred stock paying a 10.7 percent dividend on a $126 par value The preferred shares are currently selling for $151.04A bond selling to yield 13 5 percent for the purchaser of the bond The borrowing firm faces a tax rate of 34 percenta. The after-tax cost of debt from the firm is (Round to two decimal places)

Par value $ 1,000Coupon rate11.40%Market value $ 1,121Years to maturity10

A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 11.4 percent that is pad semiannually. The bond is curently selling for a price of $1,121 and wil mature in 10 years tax rate is 34 percent The b. If the firm's bonds are not frequently traded how would you go about determining a cost of ditt for this company? c. A new common stock issue that paid a $174 dividend last year The par value of the stock is $15, and the firm's dividends per share have grown at a rate of 8.1 percent per year This growth rate expected to continue into the foreseeable Muure The price of the stock is now $27.12 d Aprelemed stock paying a 107 percent dividend on a $126 par value The prefened shares are currently seling for 515104 Abond selling to yield 13 5 percent for the purchaser of the bond The borowing frm taces a l rate of 34 percent a. The after-tax cost of debt from the firm (Round to two decimal places)

A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 11.4 percent that is pad semiannually. The bond is curently selling for a price of $1,121 and wil mature in 10 years tax rate is 34 percent The b. If the firm's bonds are not frequently traded how would you go about determining a cost of ditt for this company? c. A new common stock issue that paid a $174 dividend last year The par value of the stock is $15, and the firm's dividends per share have grown at a rate of 8.1 percent per year This growth rate expected to continue into the foreseeable Muure The price of the stock is now $27.12 d Aprelemed stock paying a 107 percent dividend on a $126 par value The prefened shares are currently seling for 515104 Abond selling to yield 13 5 percent for the purchaser of the bond The borowing frm taces a l rate of 34 percent a. The after-tax cost of debt from the firm (Round to two decimal places)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Last year Carson Industries issued a 10-year, 14% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,300. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC: -Select- % Would an investor be more likely to earn the YTM or the YTC? % + b. What is the current yield? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Round your answer to two decimal places. % Is this yield affected by whether the bond is likely to be called? I. If the bond is called, the capital gains yield will remain the same but the current yield will be different. II. If the bond is called, the current yield and the capital gains yield will both be different. III. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be…
You are eyeing an investment in a corporate bond which has a YTM of 14.95%, and a stated rate of interest of 13.04% paid semi-annually, with a maturity of 20 years, and a PAR value of $1,000. What is the price of this bond? Multiple Choice $470.87 $879.39 $880.12 $1,702.84
Peterson Amalgamated recently issued 4-year semiannual coupon bonds. These bonds sell for $933.25 and have a yield-to-maturity of 8.9 percent. What is the bonds' coupon rate? Don't round steps, 2 decimal answer. _%
A firm's bonds have a maturity of 14 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 7 years at $1,063.91, and currently sell at a price of $1,119.63. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC: % -Select- v % What return should investors expect to earn on these bonds? I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. II. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. III. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. IV. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
please show work, written out and clear much preferred
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,270. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: % Would an investor be more likely to earn the YTM or the YTC?
i need the answer quickly
Too Young, Inc., has a bond outstanding with a coupon rate of 7.3 percent and semiannual payments. The bond currently sells for $1,870 and matures in 20 years. The par value is $2,000. What is the company's pretax cost of debt? Multiple Choice 8.07% 8.57% 8.30% 3.92% 7.95% 26 of 40 Nex > < Prev
Please solve on white pages.Not solve in excel.
Assume that you own a $ 1 million par value corporate bond that pays 7% in coupon interest (3.5% semiannual), has 4 years remaining to maturity, and is immediately callable at par. Its current market yield is 7% and it is priced at par. If rates on comparable securities fall by more than 40 basis points (0.2% semiannually), the bond will be called (a) Calculate the bonds price if the market rate increases by 50 basis points (0.25% semiannually) using the present value formula from (b) Calculate the bonds effective duration assuming a 50 basis point increase or decrease in market rates
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 20 years. Their nominal annual, not semiannual yield to maturity is 7.75%, they pay interest semiannually, and they sell at a price of $700. What is the bond's nominal coupon interest rate? Do not round your intermediate calculations. a. 4.77% b. 2.39% c. 2.30% d. 4.41% e. 4.60%
Your firm has issued 15-year $1000 par value bonds with 8.5% annual coupon rate. If annual coupon rates on similar bonds are now 8.5%, what could you sell your bond for today assuming semi-annual compounding? O A. $990 O B. $1000 OC. $1085 O D. Sufficient information not provided.

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